Despite rangebound performance, FPI shareholding in RIL hits record 24.9% in March 2021 – The Economic Times

Clipped from: https://economictimes.indiatimes.com/markets/stocks/news/despite-rangebound-performance-fpi-shareholding-in-ril-hits-record-24-9-in-march-2021/articleshow/82391667.cms

SynopsisMajor factors that make RIL attractive to FPIs include the rising contribution of consumer facing businesses to the revenue, a balance sheet with net cash which is similar to some of the global technology giants, prospective investments in alternative energy, and a goal to turn net carbon zero by 2035.

ET Intelligence Group: The shareholding of foreign portfolio investors (FPIs) in Reliance Industries (RIL) rose to a record 24.9% in March 2021 according to the data from Capitaline. This was despite a range bound performance of the country’s largest company by market capitalisation over the past six months.

Major factors that make RIL attractive to FPIs include the rising contribution of consumer facing businesses to the revenue, a balance sheet with net cash which is similar to some of the global technology giants, prospective investments in alternative energy, and a goal to turn net carbon zero by 2035.

The average stake of FPIs in RIL was 20.7% over the past 10 years. Their holding works out to be 25.6% at end of March 2021 after considering partly paid share of the rights issues, the data from the BSE show. The Euro pacific funds and Government of Singapore were among the top FPI investors in RIL with stakes of 2.7% and 1.2% respectively.

FPIs stake in RIL constitutes about 8% of their total portfolio value of Rs 40.6 lakh crore as on April 15, 2021. Their continued stake increase has reduced their underweight on RIL to a multi-quarter low of 180 basis points compared with the Nifty 50 weight. In contrast, the domestic mutual funds pruned their exposure in RIL to an 11-quarter low of 4.3% in March from a peak of 5.3% in June 2020.

After outperforming for nearly four years, RIL’s stock has underperformed the Nifty 50 by 36% in the past six months. Consequently, RIL’s weight in the benchmark dropped to 10.2% at the end of April 2021 compared with the peak of 14.9% at the end of September 2020.

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