Foreign institutional investors owned 45.23 per cent of the free float market capitalisation of Bombay Stock Exchange Sensex stocks on October 17. This is 3.23 percentage points higher than their holding on June 30.

FIIs bought (16.93 crore) 169.30 million Sensex shares in the quarter ended September 2003 on top of purchases of 16.752 crore (167.52 million) shares in the April-June quarter, taking their total buying to 33.581 crore (335.81 million) shares in the first half of 2003-04.

What is more, FIIs now collectively own over 40 per cent of the free float in the top 100 traded companies. Free float is the stock of a company available for trading and excludes the promoters' holding.

The increasing dominance of FIIs in the stock market was brought to light at the October 16 meeting of the Securities and Exchange Board of India's secondary market advisory committee.

The sharp rise of 2,000 points in the Sensex since April was largely fuelled by FII activity. Between April 1 and October 16, FIIs pumped in Rs 15,679.40 crore (Rs 156.79 billion) in the stock market.

The committee discussed the surge in market movements during the last 6-7 months and also took stock of the risk containment measures in the bourses. While the committee is headed by R H Patil, Sebi's representative is executive director Pratip Kar.

Besides, it has representatives from financial institutions, academia, stock exchanges and individual market experts.

Incidentally, FII holding in the market capitalisation of Sensex stocks increased from 24.91 per cent in March 2003 to 25.46 per cent in June and 27.92 per cent in the quarter ended September.

Also, FII holding in the outstanding shares of the 30 Sensex stocks increased from 20.86 per cent in March to 24.14 per cent in September. FIIs increased their stakes 2-4 per cent each in most of the frontline stocks.

They picked up 17.33 million shares of Tata Motors in the July-September quarter, increasing their holding 4.42 percentage points to 19.61 per cent in the automobile company.

During the quarter, FIIs picked up 63.67 million shares (2.90 per cent) of Reliance Industries, 16.96 million shares (2.73 per cent) of Larsen & Toubro, 7.79 million shares (2.23 per cent) of Tata Steel and 10.76 million shares (2.84 per cent) of Hindustan Petroleum.

At the end of the quarter, total foreign holding, direct as well as portfolio investment, in housing finance major HDFC increased to 75.41 per cent. This is the highest foreign holding in an Indian company.

The FII holding in ICICI Bank is 68.19 per cent, including 26.07 per cent in the bank's American Depository Receipts, and Zee Telefilms 61.70 per cent.

FIIs increased their holding in Satyam Computer to 60.1 per cent, including 10.60 per cent in its ADRs, in Infosys Technologies to 47.52 per cent (ADRs 7.88 per cent) and in Dr Reddy's Laboratories to 45.17 per cent (ADRs 22.63 per cent).