Now that the Reserve Bank of India (RBI) has put out the list of scrips in which FII investments have fallen below the ceiling, will the foreign investors step in once again?

They may or may not but this set of scrips could once again be tracked by bargain hunters who usually ride on the FII wave. Thanks to the 1,200-point fall in the Sensex over the last two months and the fall in the FII investment level in as many as 20 companies, these scrips have once again turned attractive.

The exit of FIIs from these counters has led to a substantial fall in the value of these scrips. Patheja Forgings is down from Rs 11 to Rs 3, Digital Equipment tumbled from Rs 197 to Rs 98 before recovering to Rs 140, Wartsila Diesel is down almost 50per cent at Rs 154 while Nagarjuna Construction at Rs 10 is down from Rs 22.

In the current nervous market, these investment options may look unattractive, but once the markets rebound they could witness sharp gains.

The number of companies where the FII holding has touched the investment ceiling has come down to just two from nearly 20 companies a year ago. The FII holding in companies like Carrier Aircon, Digital Equipment, Wartsila Diesel, Max India, Elgi Equipments, Patheja Forgings and State Bank of India has dropped below the 24 per cent ceiling.

With the FIIs deserting these counters, the share prices too have tumbled from their respective highs to very low levels in the past few weeks. A one-time FII favourite, Carrier Aircon has dropped from a high of Rs 330 to the current level of Rs 180, thereby making the stock attractive at a price-earnings multiple of around 16, among the lowest for MNC stocks.

While the FIIs have been on a selling spree, NRIs and OCBs have extended their commitments toa number of Indian companies and have already exhausted their investment ceiling of 10 per cent in Rajasthan Spinning and Weaving Mills, Garware Shipping and Baroda Rayon.

In another three companies - Bharati Telecom, Ion Exchange and Madras Aluminium - the investment by NRIs and OCBs has reached the trigger point of eight per cent. But ironically, at a time when almost 10 per cent of the equity has been picked up by NRIs and OCBs, the shares of these companies have not been able to withstand the bear onslaught and have plunged between 20 per cent and 50 per cent.

Garware Shipping has slumped from Rs 8 to Rs 4, Baroda Rayon has lost Rs 6.25 to Rs 5.25 and Ion Exchange is down from Rs 75 to Rs 46. While the number of companies where the FII holding touched the investment ceiling has come down substantially, NIIT and HDFC are the only two companies still being favoured by the FIIs and their investments are still at the ceiling of 24 and 30 per cent. With FIIs still on a selling spree, these scrips couldwitness a temporary drop in values.