NEW DELHI, Jan 29: Foreign institutional investors (FIIs) have acquired nearly three per cent of Corporation Bank's equity shares. A chunk of these shares were offloaded by mutual funds, whose collective holding has come down by around 2.5 per cent. The accumulation of the bank's stocks by FIIs has taken place over the last one month, which drove up the scrip to a high of Rs 116 on January 21.Sources say that the FIIs hold 2.92 per cent of the bank's equity, while mutual funds' holding has come down from around 18.8 lakh shares to 15.76 lakh shares. Mutual funds are estimated to have sold nearly 2.5 per cent of their holding. These institutional deals have seen the bank's stock topping the table in terms of volumes on the Bombay Stock Exchange. According to sources, most of the FII purchases were carried out in the first two weeks of January. Apart from FIIs, UTI has also bought around one lakh shares.
Though FIIs have been net sellers in January, they have been selectively buying scrips which haveattractive valuations.
In January, the net FII investment was a negative Rs 209 crore in the equity segment. Of the gross purchases amounting to Rs 652 crore during the month, an estimated Rs 36 crore has gone into the Corporation Bank scrip alone.
The Corporation Bank scrip, which was listed on BSE and NSE on December 5, closed at a premium of Rs 6.50 over its offer price of Rs 80 on that day. or most part of December the movement in the scrip remained in a narrow band.
The scrip crossed the Rs 100-mark on January 2, following purchase orders from FIIs.
The bank, which had come out with a Rs 304-crore public issue in October, 1997, had not reserved any shares for foreign investors. For domestic financial institutions and banks, shares worth Rs 80 crore were reserved.
NRIs and OCBs, for whom 19 lakh shares were reserved, hold 0.78 per cent and 0.73 per cent of the bank's equity.
The bank has maintained a 32 per cent growth in its net profit in the current year so far. The scrip, after peaking ataround Rs 116, has been on the slide, falling to Rs 104 on Wednesday. Market sources attribute the fall in the price to profit-booking and the overall bearish sentiment in the market.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
