Foreign shareholding in Indian cement companies have gone up during the last quarter, indicating strong overseas investors’ confidence in Indian infrastructure sector as a whole and cement industry in particular. Foreign shareholding which includes foreign institutional investor, non-resident Indians (NRIs), overseas corporate bodies (OCBs), GDRs in some case, has gone up in leading companies such as Gujarat Ambuja Cement Ltd (GACL), Grasim Industries, ACC and India Cements.
GACL witnessed the sharpest rise with total foreign shareholding rising from 31.17 per cent at the end of September 30, 2004, to 42.43 per cent at the end of December 30, 2004. In Grasim, the foreign shareholding went up from 35.34 per cent to 38.67 per cent during the same period. India Cements counter also witnessed the similar story with foreign shareholding going up to 8.09 per cent from 5.4 per cent. In ACC, the net foreign stake went up from 25.23 per cent to 25.41 per cent.
What is interesting is the fact that public shareholding in all these companies have gone down during the period, albeit marginally. "Most of the cement stocks have been market outperformer during the present rally at the bourses. Retail investors seems to have booked partial profit by offloading some of their holding," an expert said.
The confidence shown by foreign players is based on solid fundamentals with the construction boom sweeping the country. In the first nine months of this fiscal, the production and despatches have overtaken the production and despatches of the whole of last year. There also have been price appreciation by Rs 10-15 per bag. During the first nine months, cement production stood at 91.80 million tonne compared with 84.81 mt for the entire 2003-04. Similarly, despatches have gone up to 91.34Mt in April-December, up from 84.54Mt of 2003-04.