Overseas investors scaled up their exposure to power related companies such as Tata Power, Reliance Power, PFC and REC during the January-March quarter this year amid sluggish stock market conditions.
According to an analysis of 13 listed companies related to the power sector, 11 companies witnessed rise in their foreign institutional investor (FII) holdings during January-March over the preceding quarter.
Only two companies - Power Grid and Adani Power - saw FII holding falling during the quarter under review.
“In anticipation of action from the government on coal front FIIs have been investing in power companies,” said Mr Kishor Ostwal, CMD, CNI Research.
Analysts said that most of the funds invested in power stocks in the first two months of this year considering the sector as a defensive pick.
FIIs increased their holding in PFC from 7.75 per cent to 9.85 per cent at the end of March quarter.
In Reliance Power FII stake surged to 5.23 per cent in March quarter from 4.6 per cent in December quarter.
In addition, foreign fund houses stake in Tata Power rose from 20.04 per cent to 21.87 per cent. Besides, BHEL has seen a jump of overseas investors’ stake to 13.48 per cent during the fourth quarter from 12.23 per cent in December quarter.
NTPC saw its FII holding increasing from 3.73 per cent to 4.02 per cent and the exposure in NHPC grew to 1.38 per cent from 1.33 per cent in December quarter.
Similarly, in Torrent Power foreign funds hiked their stake from 1.87 per cent in December quarter to 2.46 per cent in March quarter, while GVK Power & Infrastructure saw the holding rise to 17.98 per cent from 17.30 per cent during the same period.
Among others, FIIs raised their exposure in Larsen & Toubro from 13.84 per cent to 15.62 per cent, in GMR Infra the stake rose to 11.83 per cent from 11.62 per cent and in REC the stake jumped to 19.53 per cent from 17.93 per cent.
However, in two companies — Power Grid and Adani Power — FII stake in fourth quarter have come down by over 1 per cent.
The FII holding in Power Grid fell from 13.07 per cent to 12.93 per cent at the end of January—March quarter and during the same period, FII shareholding in Adani Power slipped from 10.26 per cent to 9.41 per cent.
FIIs have made an investment of Rs 42,407 crore into the equity market so far this year and Rs 17,270.40 crore in the debt market during the same period.