By Vipin Agnihotri
Thanks to tremendous corporate performances and strong macro-economic growth in the last few years, the Indian equity market is attracting a lot more investors. Because of this, the shareholder base of India Inc has grown dramatically over the last year period.
If experts are to be believed, IT companies Satyam Computer Services and Infosys Technologies have registered the biggest increase on this count, more than doubling their shareholder bases over this period.
It has come into the notice of The India Street that between April 1,2006 and March 31, 2007, the shareholder base of Satyam increased 165 per cent from 95,356 shareholders to 252,000. It is worth mentioning in this regard that shareholder base of Satyam in 2004 was higher, at 132,000, than in 2006.
Unlike Satyam, which has seen its shareholder base up, down and up again, Infosys Technologies on the other hand has seen a steady increase in these numbers- it expanded 149 per cent to 489,000. Keeping aside, Satyam and Infosys Technologies, Wipro and TCS have seen only a modest increase in the number of shareholders – of 27 per cent and 22 per cent, respectively.
In my opinion, increasing institutional participation and the entry of new domestic investors are pushing this trend. Point to be noted here is that over the past four years, the number of FIIs registered with the Securities and Exchange Board of India (SEBI) has risen almost 100 per cent from 600 to nearly 1,100, while the number of registered FII sub accounts has touched 3,300 compared to nil in 2004.
Another significant factor that must be taken into account is the number of mutual funds investor folios has also increased to 30 million compared to around 24 million in March 2006. According to experts, this goes against the traditional wisdom that the increasing Sensex has not attracted many new retail investors.
Among other BSE Sensex companies, the shareholder bases of Cipla, L&T, Tata Steel and Hindalco have increased in the range of 24-83 per cent. On the other hand, State Bank of India and HDFC Bank have seen one per cent increase.
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