The $100-billion Tata group derives over 58 per cent of its revenue from international operations and foreign investors have always been attracted towards shares of its about 30 listed companies.
However, foreign institutional investors (FIIs) seem to have turned more bullish on the group in the recent months and they raised their stake in 12 out of the 15 major Tata companies in the last quarter ended December 31, 2012, as per the latest shareholding data of these companies.
Among these, FIIs raised their stake in IT bellwether firm TCS from 14.83 per cent to 14.96 per cent during the October-December 2012 quarter. Besides, the FII holding in Tata Motors rose from 28.47 per cent to 29.01 per cent during this period, while the same in Tata Steel moved up from 14.71 per cent to 14.79 per cent.
The other Tata companies where FIIs have raised their stake include Tata Power, Trent, Tata Communications, Tata Elxsi, Tata Global Beverages and Indian Hotels. The growing attraction among FIIs for Tata group stocks incidentally come at a time a change of guard has taken place at its Bombay House headquarters.
The 44-year-old Cyrus Mistry took over as head of Tata group following retirement of Ratan Tata on December 28, 2012. Mr Tata, who has now assumed the role of Chairman Emeritus, has spent nearly 50 years with the group including 21 years as chairman.
The companies where FII holding dipped during the last quarter were Rallis India, Voltas and Tata Teleservices. FIIs reduced their shareholding in Rallis India to 10.8 per cent from 11.85 per cent in September quarter, while in Voltas it dipped to 21.65 per cent from 22.55 per cent.
Tata Teleservices also saw decline in foreign investors holding from 0.82 per cent to 0.65 per cent in Q3. Tata group commands a market value of over $93 billion and an investor base of over 3.8 million.
According to Gajendra Nagpal, CEO of Unicon Financial Solutions, "Tata group has been the favourite of FIIs for a long time. Besides, the smooth transition of leadership from one generation to another has gone down very well with the overseas investors."
Among Tata group blue-chip companies, TCS has been showing remarkable performance quarter-on-quarter, he said. TCS had last month posted better-than-expected 26.7 per cent jump in net profit at Rs 3,550 crore for October-December quarter.