Who is buying up all of the Satyam and Infosys shares?

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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Vadodara: Hot real estate destination

By Dr Suvrokamal Dutta

Not so long ago the banyan city, Vadodara, hardly figured on the list of hot real estate destinations. As a matter of fact, land, commercial and residential property was easily available at highly affordable rates. But in last two or three years, the huge inflow of industrial investment from across sectors and growing interest of real estate developers, retailers and IT giants has put Vadodara on the growth trajectory.

If experts are to be believed, it’s tough to find a good piece of land in the best areas at the right price in the city with a population of just over 15 lakh. It has come into the notice of The India Street that the Gujarat government is already working on a plan to develop Vadodara as a knowledge city to attract several leading companies such as DLF, Raheja, Infosys and Satyam to invest in the city.

In my opinion, Vadodara has huge growth potential but it faces competition from Ahmedabad and other tier-II cities, which are preferred investment destinations for leading IT players. The non-resident Gujarati investment pouring into the city will no doubt drive the real estate growth.

In terms of statistic, land prices in Vadodara have appreciated by almost 50 percent in the last two-three years. In addition, the residential and commercial property prices in Vadodara too have shot up in the last two years. Theoretically speaking, the cost of office spaces have increased to Rs 2500-3000 per square feet now from Rs 1500-1700 two years ago. The residential property prices have jumped to Rs 1500-2000 per square feet in key areas as against Rs 1000-2000 per square feet two years ago.

It is worthwhile pointing that in Vadodara, investment in residential projects mainly comes from the actual buyers, as the concept of second home is yet to pick up here. According to Raghu Romeo of Raghu real estate, the retail as well as office space demand in the city is expected to gain momentum. Several tier-III cities in the population bracket of 60,000 to one million are on the radar of the leading retailers.

The newly developing areas such as Sindhrot, Waghodia Road, Padra Road and Sevasi are emerging as promising options for investors. The proximity of the city to Ahmedabad and Surat, the key investment hot spots and the improving civic infrastructure too are fuelling the growth.

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