FIIs Up Their Stake In Wockhardt

Shares of Wockhardt have shown huge value erosion after an import alert was issued on its Waluj manufacturing facility in May 2013. The stories unfolding from this plant took the stock to its lowest level of the year, below Rs 900. Analysts on the street were quick to downgrade the stock, cut the target prices and lower the revenue and profit estimates. Equity strategists also advised investors to stay away from the counter for a while. Retail investors offloaded their shares in losses.

It now appears that institutions have increased their positions in the stock in this carnage as the June 2013 shareholding pattern indicates that FIIs have increased their stake. The total FII stake in the company by March 2013 was 9.07% which has increased to 10.38% now. DIIs have not taken fresh positions but have not sold much stake in the company either. It also appears that LIC has sold 0.37% stake in the company while a family member of celebrity investor Shivanand Mankekar has sold 0.91% stake in Wockhardt. The SBI Emerging Business Fund, on the other hand, has entered the counter with fresh buying of 12.14 lakh shares or 1.12% stake in the company.

While no FII individually holds  even1% stake in the company, it is difficult at the moment to see which FIIs have bought/sold stake in the company. Collectively, however, the net addition in the FIIs’ stake indicates that the FIIs probably are seeing value in the stock going ahead. It seems that except for the share price, nothing much has changed. Investors holding the stock should keep faith in it instead of booking huge losses.