A STUDY OF IMPACT OF FOREIGN INSTITUTIONAL

INVESTORS ON MIDCAP & SMALLCAP MARKET

A DISSERTION SUBMITTED IN PARTIAL FULFILLMENT OF

THE REQUIREMENT FOR THE DEGREE OF MASTER OF
BUSINESS ADMINISTRATION
SUBMITTED TO: SUBMITTED
BY:
MRS. PRERNA SHRIVASTAVA GOPAL
AGARWAL
(Lecturer) Enrollment No.:
DX/07/16920

MEDICAPS INSTITUTE OF TECHNOLOGY &

MANAGEMENT INDORE

CERTIFICATE

This is to certify that Mr. Gopal Agarwal a student of Master of

Business Administration, Medicaps Institute of Technology &
Management, Indore, has successfully completed his project under
my supervision.

During this period he worked on the project titled “A STUDY OF

IMPACT OF FOREIGN INSTITUTIONAL INVESTORS ON
MIDCAP & SMALLCAP MARKET” in fulfillment for the award of
degree of Master of Business Administration of Devi Ahilya
Vishwavidhyalaya, Indore.His performance and conduct has been
good.

2
 HEAD OF DEPARTMENT PROJECT GUIDE

(Dr. Hemant Indurkar) (Mrs. Prerna

Shrivastava)
Director Lecturer

ACKNOWLEDGEMENT

3
I want to express my sincere gratitude to all those who made this study
possible. First of all I am thankful to the helpful staff and the faculty of
Medicaps Institute of Technology & Management. One of the most
important tasks in every good study is its critical evaluation and
feedback which was provided to me by my guide Mrs. Prerna
Shrivastava.I am also thankful to Mr. Vardhan Choubey for
investing his precious time to discuss and criticize this study in depth
and explained the meaning of different concepts and how to think
when it comes to problem discussions and theoretical discussions.

I am also thankful to Mr. Akhilesh Rathi owner of “SNR Securities

& Finance A Franchisee of Angel Broking Ltd.” for his support and
guidance for the project.

(Gopal Agarwal)

4
 CONTENT

Abstract

I
Introduction..............................................................................................
............. 6
II Rationale of
Study………………………………………………………………. 7
III
Objective..................................................................................................
............. 8
IV Research
Methodology ........................................................................................ 9
V Foreign Institutional
Investors………………………………………………….. 10
V.i FII registered in India
V.ii Why FII Invest in India
VI BSE Mid-Cap and BSE Small-Cap
Index………………………………………. 12
VII Foreign Institutional Investment: A Cost - Benefit
Analysis……………………. 13
VIII
Analysis………………………………………………………………
…………. 14
IX
5
Results…………………………………………………………………
………... 17
X
Conclusion……………………………………………………………
…………. 18

Appendix
Historical Datasheet
Midcap & Smallcap Indices Vs Sensex
FII Investment Vs Midcap & Smallcap Indices
Volatility Analysis
Scripwise Impact of FII Shareholding on Price Movement of
Midcap Companies
Scripwise Impact of FII Shareholding on Price Movement of
Smallcap Companies

References

ABSTRACT
6
Foreign Institutional Investors have gained a significant role in Indian
capital market. This project analyses the impact of foreign institutional
investment particularly among Midcap & Smallcap market of Bombay
Stock Exchange. Analyzing the relationship between foreign
institutional investment and movement of indices and movement of
prices of ten scrip each of Midcap and Smallcap Indices.
It is observed that there is a high degree of correlation between
Midcap & Smallcap Indices and Sensex and also FII gross purchases
show high degree of correlation with Midcap and Smallcap
Indices.FIIs are also responsible for volatility in the stock market.

7
 INTRODUCTION

The increasing role of institutional investors has brought both

quantitative and qualitative developments in the stock market viz.;
expansion of securities business; increased depth and breadth of the
market, and above all their dominant investment philosophy of
emphasizing the fundamentals have rendered efficient pricing of the
stocks. The FIIs are major institutional investors in Indian capital
market. Movement in the sensex has clearly been driven by the
behavior of Foreign Institutional Investors. The presence of Foreign
Institutional Investors in the BSE Midcap & Smallcap companies and
their active trading behaviours, their role in determining the share
price movements must be considerable. Indian stock markets are
known to be known narrow and shallow in the sense that there are few
companies whose shares are actively traded. Although there are more
than 8000 companies listed with stock exchange, the BSE Midcap &
Smallcap Index incorporates only 685 companies. This shallowness
also means that the FIIs can also affect the behavior of other retail
investors, who tend to follow the FIIs when making their investment
decision.
8
Theoretically, FII investments bring in global liquidity into the equity
markets and raise the price-earning ratio and thereby reduce the cost of
capital domestically. Lower cost of funds on account of low interest
rates will aid the economic recovery and support valuations; Net FII
inflows into India increased steadily since the mid 1990s and reached
Rs. 32000 crore in 2009. Along with this surge in FII inflows there has
also been a boom in the Indian capital market as indicated by the stock
market indices and market capitalisation. The surge in capital inflows
could be viewed as an outcome of a combination of ‘push’ and ‘pull’
factors, of which stagnant returns from the previous investment
destinations and the present rate of growth of Indian economy seems
to play an important role. Apart from other macro economic
consequences, investors are directly affected by this increase in FII
flows as it enhances or diminishes the security prices and returns in
Indian capital market.

9
 RATIONALE OF STUDY

Foreign Institutional Investors are said to be the drivers of the market.

They are the cause behind the rise and fall of Sensex. FII investment
trends tell us about many effects that the Indian market is
experiencing. The companies in which they invest are getting
overvalued. Whenever FII find any trouble they withdraw their
investments.
There is a lot of discussion in the market about Sensex of
BSE but many of us do not talk about other Indices like BSE Midcap
and Smallcap which are high growth oriented and risky investment
avenues.The return provided by them is high as compared to Sensex
scrips. FIIs are also interested in investment in these scrips and impact
these indices. So inorder to find the impact of FII on these market I
had taken this study.

10
 OBJECTIVE

The objective of this study is to:

 Find the relation of Midcap & Smallcap Indices with the Sensex.
 Find the relationship between the Midcap & Smallcap Indices
variations with the variation of investments made by the Foreign
Institutional Investors.
 Find the impact of activities of Foreign Institutional Investors on
the volatility of Midcap & Smallcap market.
 To analyze the impact of FII shareholding on Price movement of
Midcap & Smallcap companies.

11
 RESEARCH METHODOLOGY

Research refers to search for knowledge. One can define research

as a scientific & systematic search for pertinent information on a
specific topic. Research is an original contribution to existing stock of
knowledge making for its advancement. It is the pursuit of truth with
the help of observations.

Type of Research:

The Research which will be carried out by me is descriptive &

12
analytical Research. The Research is on” A Study of Impact of
Foreign Institutional Investors on Midcap & Smallcap Markets
“.I am focusing my research on Midcap & Smallcap market of
Bombay Stock Exchange.In this research I have used FIIs gross
purchases data to find the relation with Midcap & Smallcap Indices. I
have used both FIIs gross purchases & sales data to analyse the
volatility. I have taken closing prices of Midcap & Smallcap
companies & closing value of both Indices.

Data Collection:

Secondary sources have been used for the collection of the data
used in the research.

 Collecting data from Internet.

 Collecting data from BSE, SEBI websites etc.
 Collecting Information from books.
 Collecting data from Magazines.

Sample Size:
Four year data was collected as:
 Monthly data from BSE of Midcap & Smallcap Indices (2005-
2009)
 Monthly data of FII flow in equity (2005-2009)
 Quarterly FIIs shareholding data of ten companies each of
Midcap & Smallcap Indices (2005-2009)
 Quarterly closing price data of ten companies each of Midcap &
Smallcap Indices (2005-2009)

Tools for Analysis:

 Various Graphs/Charts etc.

 Correlation Analysis

13
 FOREIGN INSTITUTIONAL INVESTOR

Foreign Institutional Investor (FII) is used to denote an investor -

mostly of the form of an
institution or entity, which invests money in the financial markets of a
country different from the one where in the institution or entity was
originally incorporated.
FII investment is frequently referred to as hot money for the
reason that it can leave the country at the same speed at which it
comes in.
The Union Government allowed the entry of FIIs in order to encourage
the capital market and attract foreign funds to India. Today, FIIs are
permitted to invest in all securities traded on the primary and
secondary markets, including equity shares and other securities listed
or to be listed on the stock exchanges. The original guidelines were
issued in September 1992. Subsequently, the Securities and Exchange
Board of India (SEBI) notified the SEBI (Foreign Institutional
Investors) Regulations, 1995 in November 1995.
Over the years, different types of FIIs have been allowed to operate in
Indian stock markets. They now include institutions such as pension
funds, mutual funds, investment trusts, asset management companies,
14
nominee companies, incorporated/institutional portfolio managers,
university funds, endowments, foundations and charitable
trusts/societies with a track record. Proprietary funds have also been
permitted to make investments through the FII route subject to certain
conditions.
FIIs can invest in all securities traded on the primary and secondary
markets. Such investments include equity/debentures/warrants/other
securities/instruments of companies unlisted, listed or to be listed on a
stock exchange in India including the Over-the-Counter Exchange of
India, derivatives traded on a recognized stock exchange and schemes
floated by domestic mutual funds. A major feature of the guidelines is
that there are no restrictions on the volume of investment - minimum
or maximum - for the purpose of entry of FIIs. There is also no lock-in
period prescribed for the purpose of such investments. Further, FIIs
can repatriate capital gains, dividends, incomes received by way of
interest and any compensation received towards sale/renouncement of
rights offering of shares subject to payment of withholding tax at
source. The net proceeds can be remitted at market rates of exchange.
FII REGISTERED IN INDIA:

The SEBI is the nodal agency for dealing with FIIs, and they have
to obtain initial registration with SEBI. For granting registration to an
FII, the SEBI takes into account the track record of the FII, its
professional competence, financial soundness, experience and such
other criteria as may be considered relevant by SEBI. Besides, FIIs
seeking initial registration with SEBI will be required to hold a
registration from an appropriate foreign regulatory authority in the
country of domicile/incorporation of the FII.India had 528 FIIs
registered with SEBI by end of 2001 and by end of Mar-2009 the
number increased to1581. The trend in the number of registered
FIIs“Table-3” has been consistently on the rise showing the significant
amount of confidence that Indian Capital market has developed in the
last few years. Not only has been the number increasing on a
consistent basis, but the amount of inflow into Indian market has also

15
seen a manifold increase. The gross purchase, sales and net investment
“Table-4”
figure on monthly basis gives a fair idea about the consistency
of their investments in our country.

WHY FII INVEST IN INDIA:

As per the theory of international portfolio investment the basic

motivation for any investor
including the FIIs for investing in foreign equity is to diversify their
portfolio, reduce the diversifiable risk and earn higher returns.
Essentially this is a two-step decision. The first step is the choice of
the country. Having decided on the host country, the FII has to decide
about the portfolio composition or portfolio choice within the country
concerned. In taking the first step, since international investments
involve returns in foreign currency, the same have to be factored in the
analysis.
Consider an American investor buying stock of an Indian company.
Let P0 and P1 be the stock prices at the beginning and end of the
investing period respectively. The domestic return in India on this
stock can be labeled Rd, which would be as follows:

Rd = (P1-P0) /P0 .......................................................

(1)

For the foreign investor, the return would be RF derived as follows:

RF = (X1P1- X0P0) /X0P0

.......................................... (2)
where, X0, X1 denote the Rupee-Dollar exchange rate at the beginning
and end of the investing period.
16
 Any foreign equity investor simultaneously invests in the
currency of the country whose stock is purchased and returns on
currency Rc would be as follows:

Rc = (X1-X0)/X0
...................................................... (3)
From equations (1), (2) and (3) it can be shown that

1 + Rf = (1+Rd) (1+Rc) and Rf = Rd + Rc + RdRc

Since the product of Rd and Rc would be small, both being percentages

and less than 1.0, it can be concluded that Rf approximates to (Rd+Rc).
Taking variance of this approximation as a measure of risk to an
international investor in domestic stock we have

VarRf = VarRd + VarRc + 2(Correlation of Rd and Rc)

(Std.Deviation of Rd) (Std.Dev.of Rc)

where, Var stands for variance of expected returns, as measure of risk.

Now, risk for a foreign investor would be determined among other

things by correlation between domestic returns in the host country and
returns on its currency, which can be very low or even negative. More
importantly, since correlations between stock returns in different
countries are lower than correlations among stock returns in the same
country, investment in foreign assets can reduce the overall risk for an
investor holding an internationally diversified portfolio.

17
 BSE MIDCAP AND BSE SMALLCAP INDEX

BSE introduced the new index series called 'BSE Midcap' index and
'BSE Smallcap' index on April 11, 2005 with base index value 1000 to
track the performance of companies with relatively smaller market
capitalization. The market capitalisation of the company represents the
total dollar value of the company's outstanding shares. This is equal to
the current market price of its stock multiplied by the number of shares
of stock that it has outstanding. That number gives you the market
value of the company, which is one measure of the company's size.
Roughly speaking, there are three basic categories of market
capitalisation: largecap, midcap and smallcap.The definitions for each
of these might vary somewhat depending on whom you are talking to,
but usually they are as follows:
Largecap: Market Cap valued at more than $ 10 billion
Midcap: Market cap valued between $ 2 billion and $ 10 billion
Smallcap: Market cap valued at less than $ 2 billion
In general, the larger the cap size, the more established the company
and the more stable the price of its stock. Smallcap and Midcap
companies usually have a higher potential for future growth than
largecap companies,but their stock tends to fluctuate more in
price.Midcap stocks are more risky than large cap stocks and less risky
than smallcap stocks. Then what makes a small & midcap attractive to
investors is the potential for growth that could result in a significant
return on the shares of stock. Because the company issuing the stock is
considered to be growing, there is great potential for the price per
share to increase over the short term. For investors who wish to realize
quick gains on their investments, these appear to be an ideal
investment. However, the enhanced potential for growth also carries an
increased level of volatility. As time goes on, the company could
encounter unforeseen factors that inhibit the increase in the value of
the stock. When this happens, the stock may become stagnant or even
begin to fall in value.

18
In Smallcap and Midcap indices the numbers of companies are
464 and 221 respectively.

FOREIGN INSTITUTIONAL INVESTMENT: A COST -

BENEFIT ANALYSIS

There are always some costs associated with a lot of benefits. So it is

useful to summarize the benefits and costs for India of having foreign
inflows.

BENEFITS

A) Reduced cost of Equity:

FII investment reduces the required rate of return for equity, enhances
stock prices, and fosters investment by Indian firms in the country.

B) Knowledge Flows:
The activities of international institutional investors help strengthen
Indian finance. FIIs advocate modern ideas in market design, promote
innovation, development of sophisticated products such as financial
derivatives, enhance competition in financial intermediation and lead
19
to spillovers of human capital by exposing Indian participants to
modern financial techniques and international best practices and
systems.

C) Strengthening Corporate Governance:

Domestic institutional and individual investors, used as they are to the
ongoing practices of Indian corporate, often accept such practices,
even when these do not measure up to the International benchmarks of
best practices. FIIs, with their vast experience with modern corporate
governance practices, are less tolerant of malpractice by corporate
managers and owners (dominant shareholder). FII participation in
domestic capital markets often lead to vigorous advocacy of sound
corporate governance practices, improved efficiency and better
shareholder value.

D) Improving Market Efficiency:

A significant presence of FIIs in India can improve market efficiency
through two channels. First, when adverse macroeconomic news, such
as a bad monsoon, unsettles many domestic investors, it may be easier
for a globally diversified portfolio manager to be more dispassionate
about India's prospects and engage in stabilizing trades. Second, at the
level of individual stocks and industries, FIIs may act as a channel
through which knowledge and ideas about valuation of a firm or an
industry can more rapidly propagate into India.

COSTS

A) Create Volatility:
There are concerns that foreign investors may withdraw their money at
the hint of a trouble in India or firm. This will make others to also take
out their money creating volatility in the market.

B) Possibility of Takeovers:
While FIIs are normally seen as pure portfolio investors, without
interest in control, portfolio investors can occasionally behave like
20
FDI investors and seek control of companies that they have a
substantial shareholding in. Such outcomes, however, may not be
inconsistent with India's quest for greater FDI.

ANALYSIS

The introduction of Midcap & Smallcap Indices at Bombay Stock

Exchange was on April 11,2005 so for the purpose of statistical
analysis I have considered four years monthly data from April-2005 to
March-2009 of FII Investments,BSE Midcap,Smallcap & Sensex
Indices and scripwise quarterly data of FII Shareholding. Correlation
Test has been carried out to find the degree of association between the
FII Gross Purchases and BSE Midcap & Smallcap Indices; Sensex and
Midcap & Smallcap Indices;FII Shareholding & Scripwise price. I
have considered closing price for Sensex, Midcap & Smallcap Indices
and various scrips. First of all correlation between sensex and midcap
& smallcap indices is carried out to verify relation between them.

CORRELATION TEST:

A) Midcap & Smallcap Indices Vs Sensex & Gross Purchase:

SENSEX FII GROSS

PURCHASE
21
 MIDCAP 0.94795641 0.825463052
INDEX 9
SMALLCAP 0.89688082 0.794646577
INDEX 3
(refer Annexture
1,2,3)
Table-1
B) Scripwise Price Vs FII Shareholding:

COMPANY NAME FII

SHAREHO
LDING
MIDCA JSW Steel Ltd. 0.545181642
P United Phosphorus Ltd. -0.258261613
Colgate Palmolive India Ltd 0.624952178

Federal Bank Ltd 0.300078199

Jain Irrigation Systems Ltd 0.561075571
Lupin Ltd 0.189994534
INDIAN HOTELS COMPANY 0.446184332
LTD
Voltas Ltd 0.093306698
Tata Tea Ltd 0.342942159
Mphasis Ltd -0.318073722
SMALL South Indian Bank Ltd 0.619250624
CAP Kesoram Industries Ltd 0.773371425

Gammon India Ltd 0.111440389

Raymond Ltd 0.356246159
NIIT LTD -0.051450138
United Breweries Holdings Ltd 0.056704137
Bombay Dyeing & 0.519389221
Manufacturing Company Ltd
Mahindra Lifespace Developers -0.191815788
Ltd
22
 TVS Motor Company Ltd 0.584577343
Rain Commodities Ltd 0.584286285
Table-2

Sensex of Bombay Stock Exchange is considered as the barometer of

Indian Capital Market. So first of all I begin with analyzing the
relation between Sensex and Midcap & Smallcap Indices. From the
Graph-1 between Midcap Index and Sensex we can find co-movement
between two indices leaving some months August-2005, March-2006,
April-2006 and November-2007. From the Graph-2 between Smallcap
Index and Sensex we can find co-movement between two indices
leaving some months August-2005, June-2006 and November-2007
.This inference is further supported by high degree of correlation
coefficient obtained between two variables in the Table-1 above. This
high degree of correlation further suggests that there is some
Indirect/Direct correlation between the Midcap & Smallcap Indices
and FIIs investments.

FIIs gross purchases have been taken as independent variable to find

the impact of FII because net investments involve negative values
when there are more sales as compared to purchases but Midcap &
Smallcap Indices values are always positive instead of major
falls/gains in the Indices. By taking Gross Purchases I have tried to
eliminate this mathematical error and used gross purchases
fluctuations to find the relation between the two.FII invest in scrips of
these Indices because they provide higher returns as compared to
largecap scrips. Table-1 indicates a high degree of correlation between
Midcap & Smallcap Indices and FIIs gross purchases. Analysis of
Graph-3 & Graph-4 indicates that there is a co-movement between the
two variables barring the period Jun-2005 to Aug-2005, Nov-2007 to
Jan-2008 indicating negative correlation. During Nov-2007 to Jan-
23
2008 the FII purchases decreased because during the month of Oct-
2007 Indian government took some strict measure to control the usage
of the Participatory notes. This lead the FII to withdraw from the
Indian market as they were not sure of how the measure taken by the
govt will be implemented. During the month of Dec-2007 the
subprime losses caused the decrease in purchases by the FII. As the
subprime losses mainly hit the US economy and the majority of FII
participating in the Indian capital market are from US. Graph-5
represents the relation between gross purchases and gross sales. We
can see from the graph that gross purchases are increasing from Apr-
2005 to Mar-2006 & Jul-2006 to Oct-2007 and whenever gross sales
are lower than gross purchases there is upward trend in both Indices
leaving some exceptions as there are certain other factors like foreign
exchange rate, interest rate, political conditions of the country
etc.which affect the indices movement. This analysis indicates the
impact of FIIs on Indices. An FII driven market can impact the real
economy indirectly, when their behavior in the market exerts pressure
on policy makers. Secondly, the wealth effect’ where capital gains are
translated into increased consumption and investment, can act as a
more direct link between equity and physical markets.

FIIs are always considered to increase the volatility of market.

Volatility is often viewed as a negative in that it represents uncertainty
and risk. However, volatility can be good in that if one shorts on the
peaks, and buys on the lows one can make money, with greater money
coming with greater volatility. The possibility for money to be made
via volatile markets is how short term market players like day traders
hope to make money, and is in contrast to the long term investment
view of buy and hold. Foreign institutional investment is certainly
volatile in nature and its volatility has certainly posed some threats to
the Indian stock market considering its influence on the market.
Increase in investment by FIIs cause sharp price increase. It would
provide additional incentives for FII investment and this encourages
further investment so that there is a tendency for any correction of
price and when the correction begins it would have to lead by an FII
24
pullout and can take the form of extremely sharp decline in the share
prices.Graph-5 clearly indicates this fact that whenever there are more
purchases as compared to sales than there is increase in the value of
Indices and whenever there are more sales as compared to purchases
there is decrease in Indices.

Table-2 indicates varying degrees of correlation between FII

shareholding and Scripwise price of sample companies of Midcap &
Smallcap Indices but if we take the average of quarterly data of FII
shareholding & Scripwise price it shows significant co-movement. The
growing significance of FIIs in the Midcap & Smallcap Indices can be
observed from the increase in average percentage share of FIIs in
sample companies of Midcap & Smallcap Indices, which has increased
from 14.513% in Jun 2005 to 25.04% in Dec- 2007 in Midcap
companies and from 11.618% in Jun-2005 to 25.555% in Sep-2007 in
Smallcap companies. We can see negative correlation between FII
shareholding and Scripwise price of sample companies of Midcap &
Smallcap Indices because only FIIs are not responsible for the
fluctuations instead there are other factors like company specific
factors, speculative trading, interest rate prevailing in the market,
political factors, government policies related to specific sectors etc.
which cause a significant change in the prices.

25
26
 RESULTS

 There is a continuous increase in the number of registered FIIs

and the Gross purchases made by them.

 The movements in Midcap & Smallcap Indices and Sensex are

highly correlated.

 The movement of FIIs gross purchases follows almost significant

influence on the movement of Midcap & Smallcap Indices. When
there is a downward trend in FIIs due to huge selling, there is
decline in Midcap & Smallcap Indices. On the other hand if there
is an upward trend in FII due to more gross purchases as
compared to selling, Indices rises.

 The high degree of volatility in stock market is due to

1) The increase in investment by FIIs which increases stock
indices that in turn increases the price and encourages
further investments. In this event when any correction takes
place the stock price decline and there will be pull out by the
FII in a large number as earning per shares declines.
2) The FIIs manipulate the situation of boom in such a manner
that they will wait till the index rises up to a certain height
and exit at an appropriate time. This tendency increases the
volatility further.

 There is a continuous increase in FII shareholding of companies

of Midcap & Smallcap Indices.

 Together with FIIs there are also other factors which influence the
movement of Indices and stock prices like company specific
factors, speculative trading, interest rate prevailing in the market,
political factors, government policies related to specific sectors
27
 etc.

CONCLUSION

In the Indian stock market FIIs have a disproportionately high level of

influence on the market sentiments and price trends. Results of the
study shows the linkages between the FIIs inflows and the
performance of Midcap & Smallcap Indices are robust and
significant.FIIs have significant impact on the share prices of the
Midcap & Smallcap Indices companies and their active trading
behaviour.Small and periodic shifts in their behavior leads to market
28
volatility.

Lastly I would like to recommend that Government should certainly

encourage Foreign Institutional Investment but should keep a check on
the volatility factor. Long term funds should be given priority and
encouraged. Some of the actions that could be taken to ensure stability
are

 Strengthening domestic Institutional Investors

 Operational flexibility to impart stability to the market

 Knowledge activities and research programs

29
APPENDIX

30
HISTORICAL DATASHEET

FII REGISTERED IN INDIA

31
FINANCIAL DURING THE TOTAL
YEAR YEAR REGISTERED
1992-93 0 0
1993-94 3 3
1994-95 153 156
1995-96 197 353
1996-97 99 439
1997-98 59 496
1998-99 59 450
1999-00 56 506
2000-01 84 528
2001-02 48 490
2001-03 51 502
2003-04 83 540
2004-05 145 685
2005-06 131 803
2006-07 247 993
2007-08 253 1219
2008-09 232 1581
Table-3

32
 Midcap Smallca
FII INVESTMENT (Rs. Crore) Index p Index Sensex
Gross Gross Net
Purchas Sales Purchase/Sale close
Month e s close close
April- 15261.7 16308.8 -1047.1
2005 3049.65 3839.25 6154.44
May-2005 15522.6 16330.2 -807.6 3263.27 4300.84 6715.11
June-2005 27693.1 21931 5762.1 3310.35 4396.21 7193.85
July-2005 25589.3 17377.1 8212.2 3680.92 4919.51 7635.42
August- 26455.1 22042.5 4412.6
2005 4064.49 5925.14 7805.43
September 24160.7 20056.1 4122.6
-2005 4196.7 5697.69 8634.48
October- 25817.5 29623.1 -3805.6
2005 3771.56 4952.5 7892.32
November 23739.1 19290.5 4448.6
-2005 4175.19 5567.17 8788.81
December 31563.4 22098.2 9465.2
-2005 4427.03 5943.11 9397.93
January- 34762.8 31542.1 3220.7
2006 4716.53 6225.35 9919.89
February- 35603.1 28031.2 7571.9 10370.2
2006 4789.75 6144.48 4
March- 53578.7 47046.4 6532.3 11279.9
2006 5348.62 6591.66 6
April- 40415.6 39826.4 589.2 12042.5
2006 5843.29 7397.48 6
49338.2 57585.5 -8247.2 10398.6
May-2006 5052.44 6364.29 1
39845.6 38427.4 1418.2 10609.2
June-2006 4381.11 5357.04 5
24983.1 23535.2 1447.9 10743.8
July-2006 4303.28 5131.48 8
August- 28104.6 23330.6 4774 4798.07 5778.99 11699.0
33
2006 5
September 33014.2 26782.5 6231.7 12454.4
-2006 5148.38 6161.73 2
October- 27591.9 23013.3 4578.54
2006 4 5396.13 6392.59 12961.9
November 31146.9 24572.2 6574.74 13696.3
-2006 6 2 5721.6 6647.08 1
December 37419.5 40830.4 -3410.9 13786.9
-2006 5805.18 6892.32 1
January- 47506.7 47412.3 94.45 14090.9
2007 7 2 6045.1 7503.5 2
February- 51568.9 45503.9 6065 12938.0
2007 5508.74 6705.91 9
March- 50552.6 49149.3 1403.3
2007 5384.12 6470.51 13072.1
April- 44701.5 39269.7 5431.8 13872.3
2007 5795.72 6993.84 7
51574.9 47000.4 4574.5 14544.4
May-2007 6222.4 7413.03 6
54748.5 46808.9 7939.6 14650.5
June-2007 6527.03 7730.4 1
80216.2 62083.4 18132.8 15550.9
July-2007 6718.08 8070.63 9
August- 58223.2 65750 -7526.8
2007 6608.42 8060.52 15318.6
September 70694.6 51746.1 18948.5
-2007 7422.43 9099.93 17291.1
October- 124882. 109304. 15577.6 19837.9
2007 3 7 8135.21 9796.86 9
November 89510 94107.4 -4597.4 10526.0 19363.1
-2007 8553.56 2 9
December 80988.1 76091.4 4896.7 13348.3 20286.9
-2007 9789.49 7 9
January- 103129 120455. -17326.3 10124.4 17648.7
2008 3 7766.62 2 1
34
February- 76437.1 71017.2 5419.9 17578.7
2008 7680.39 9628.13 2
March- 70322.7 70198.3 124.4 15644.4
2008 6427.82 7841.62 4
April- 62969.6 61990.6 979 17287.3
2008 7138.74 8773.57 1
60640.3 65557.6 -4917.3 16415.5
May-2008 6760.54 8133.04 7
June-2008 61490.6 72068.3 -10577.7 5386.48 6701.96 13461.6
64526.3 65539.2 -1012.9 14355.7
July-2008 5567.37 6912.79 5
August- 46401.9 48467.7 -2065.8 14564.5
2008 5742.29 6891.64 3
September 68029.6 75966.6 -7937 12860.4
-2008 4798.29 5577.47 3
October- 49339.3 63587.9 -14248.6
2008 3200.02 3765.11 9788.06
November 28273.8 31094.1 -2820.3
-2008 2885.76 3304.61 9092.72
December 29197.6 27866.7 1330.9
-2008 3235.05 3683.11 9647.31
January- 29458.7 32573.6 -3114.9
2009 2941.47 3339.05 9424.24
February- 21863.2 24553.7 -2690.5
2009 2758.29 3106.01 8891.61
March- 32177.4 31908.4 269
2009 2956.23 3246.63 9708.5

Table-4

35
 Percentage Closing
MIDCAP COMPANY Quarter Shareholding of FII Price
JSW Steel Jun , 05 9.34 251.2
Sep , 05 10.97 289.75
Dec , 05 15.33 229.3
Mar , 06 17.8 302.7
Jun , 06 19.34 275.15
Sep , 06 19.33 285.5
Dec , 06 18.76 386.9
Mar , 07 18.74 493.45
Jun , 07 23.41 611.45
Sep , 07 26.5 851.05
Dec , 07 29.03 1318.45
Mar , 08 26.36 819.1
Jun , 08 29.27 901.1
Sep , 08 28.23 480.2
Dec , 08 29.36 229.5
Mar , 09 29.03 231.85
UNITED PHOSPHORUS
LTD Jun , 05 26.1 807.05
Sep , 05 25.54 209.25
Dec , 05 28.23 240.05
Mar , 06 35.21 261.35
Jun , 06 35.35 236.55
Sep , 06 35.44 244.05
Dec , 06 35.13 300.35
Mar , 07 33.57 324.55
Jun , 07 34.98 311.1
Sep , 07 35.39 396.2
Dec , 07 44.49 348.8
Mar , 08 43.1 262.3
Jun , 08 41.63 280.15
Sep , 08 38.24 308.85
Dec , 08 35.27 107.6
36
 Mar , 09 34.78 97.75
COLGATE
PALMOLIVE INDIA
LTD Jun , 05 4.83 243.95
Sep , 05 5.17 250.35
Dec , 05 7.2 269.35
Mar , 06 10.06 432.05
Jun , 06 9.94 388.95
Sep , 06 10.57 367.3
Dec , 06 11.39 388.5
Mar , 07 11.85 332.4
Jun , 07 11.83 369.6
Sep , 07 10.92 401.9
Dec , 07 8.15 407.45
Mar , 08 7.84 382.35
Jun , 08 7.9 355.55
Sep , 08 8.19 403.4
Dec , 08 9.12 408.1
Mar , 09 10.09 470.75

Federal Bank Ltd Jun , 05 8.74 158.6

Sep , 05 15.51 187.5
Dec , 05 26.43 182.35
Mar , 06 21.32 201.65
Jun , 06 30.46 166.25
Sep , 06 33.16 211.75
Dec , 06 37.25 218.25
Mar , 07 33.64 215.55
Jun , 07 35.49 302.05
Sep , 07 38.13 372.05
Dec , 07 39.6 335.95
Mar , 08 42.05 216.3
Jun , 08 42.15 182
Sep , 08 42.79 204.5
Dec , 08 39.93 162
37
 Mar , 09 38.89 138.1
Jain Irrigation Systems
Ltd Jun , 05 10.12 132.3
Sep , 05 33 171.1
Dec , 05 39.8 208.2
Mar , 06 35.16 250.75
Jun , 06 38.58 217.7
Sep , 06 40.35 275.1
Dec , 06 40.89 382.8
Mar , 07 42.98 417.55
Jun , 07 40.22 480.15
Sep , 07 41.93 546.05
Dec , 07 41.31 645.85
Mar , 08 39.6 592.05
Jun , 08 43.22 486.95
Sep , 08 41.97 401.05
Dec , 08 41.1 350.3
Mar , 09 42.99 342.1
Lupin Ltd Jun , 05 13.92 695.1
Sep , 05 11.7 755.45
Dec , 05 12.35 766.85
Mar , 06 12.77 1018.6
Jun , 06 12.12 895
Sep , 06 12.94 461.25
Dec , 06 13.58 612.05
Mar , 07 13.77 605.65
Jun , 07 10.84 732.55
Sep , 07 10.99 586.15
Dec , 07 13.46 633.7
Mar , 08 8.25 493.9
Jun , 08 12.41 666.85
Sep , 08 12.98 719.9
Dec , 08 11.85 617.85
Mar , 09 11.15 689.2
INDIAN HOTELS Jun , 05 19.32 624.25
38
COMPANY LTD.
Sep , 05 22.87 765
Dec , 05 23.46 988.05
Mar , 06 22.33 1356.9
Jun , 06 21.31 1143.35
Sep , 06 23.43 1384.3
Dec , 06 22.43 154.25
Mar , 07 24.07 145.4
Jun , 07 23.46 150.6
Sep , 07 22.56 138.15
Dec , 07 22.17 159.55
Mar , 08 19.28 111.85
Jun , 08 18.68 77.15
Sep , 08 17.19 67.4
Dec , 08 17.43 45.05
Mar , 09 17.17 39.4
Voltas Ltd Jun , 05 11.4 229.55
Sep , 05 18.89 475.45
Dec , 05 21.84 599.7
Mar , 06 23.45 1004.75
Jun , 06 24.08 773.65
Sep , 06 24.48 103.5
Dec , 06 27.48 114.4
Mar , 07 28.69 84.8
Jun , 07 29.99 111.25
Sep , 07 26.63 162.95
Dec , 07 26.48 246.25
Mar , 08 22.2 177.95
Jun , 08 19.99 123.75
Sep , 08 17.89 92.3
Dec , 08 15.26 60.3
Mar , 09 11.31 46.15
Tata Tea Ltd Jun , 05 19.03 620.05
Sep , 05 22.93 841.05
Dec , 05 22.3 948.35
39
 Mar , 06 18.09 867.95
Jun , 06 17.1 765.5
Sep , 06 12.09 749.15
Dec , 06 11.51 720.05
Mar , 07 12.94 607.85
Jun , 07 12.47 852.75
Sep , 07 12.66 802.3
Dec , 07 13.18 905.65
Mar , 08 12.91 824.35
Jun , 08 14.51 746.95
Sep , 08 14.45 669.95
Dec , 08 13.46 602.15
Mar , 09 13.44 585.65
Mphasis Ltd Jun , 05 22.33 277.05
Sep , 05 29.34 249.75
Dec , 05 31.23 149.2
Mar , 06 31.26 208.3
Jun , 06 16.28 151.55
Sep , 06 13.14 185.55
Dec , 06 13.83 303.45
Mar , 07 11.47 282.25
Jun , 07 11.61 328.35
Sep , 07 9.6 286
Dec , 07 12.53 306.6
Mar , 08 13.79 200.1
Jun , 08 16.56 214.9
Sep , 08 15.38 189
Dec , 08 15.08 156.35
Mar , 09 11.69 199.2

Table-5

40
 Percentage
SMALLCAP Shareholding of Closing
COMPANY Quarter FII Price (Rs.)
South Indian Bank Jun ,
Ltd 05 1.32 55.65
Sep ,
05 4.19 73.65
Dec ,
05 4.19 64.7
Mar ,
06 18.48 61.65
Jun ,
06 20.33 54.45
Sep ,
06 27.28 69.55
Dec ,
06 35.04 85.1
Mar ,
07 41.84 99
Jun ,
07 43.21 127.1
Sep ,
07 44.07 163.25
Dec ,
07 46.86 222
Mar ,
08 45.84 139.2
Jun ,
08 42.74 100.85
Sep ,
08 40.94 103.75
Dec ,
08 39.71 56.75
Mar ,
09 35.9 51.3
41
Kesoram Industries Jun ,
Ltd 05 6.64 114.75
Sep ,
05 5.64 163.55
Dec ,
05 4.95 153.75
Mar ,
06 5.87 211.9
Jun ,
06 3.9 215.45
Sep ,
06 5.73 503.55
Dec ,
06 7.18 546.95
Mar ,
07 7.43 342.95
Jun ,
07 7.42 453.35
Sep ,
07 9.07 578.95
Dec ,
07 8.72 588
Mar ,
08 5.96 391.75
Jun ,
08 4.98 255.3
Sep ,
08 4.84 216.75
Dec ,
08 3.94 138.4
Mar ,
09 3.99 135.35
Jun ,
Gammon India Ltd 05 9.05 264.15
Sep , 11.67 406.3
42
 05
Dec ,
05 13.51 414.3
Mar ,
06 17.9 541.5
Jun ,
06 24.93 349.7
Sep ,
06 28.58 364.6
Dec ,
06 29.79 419.5
Mar ,
07 30.81 301.05
Jun ,
07 32.8 410.75
Sep ,
07 34.34 465.6
Dec ,
07 31.21 595.05
Mar ,
08 28.26 388.55
Jun ,
08 25.98 216.35
Sep ,
08 24.77 138.15
Dec ,
08 23.74 78.6
Mar ,
09 25.06 58
Jun ,
Raymond Ltd 05 10.12 331.55
Sep ,
05 10.53 390.7
Dec , 9.72 403.95
05
43
 Mar ,
06 7.58 517.7
Jun ,
06 6.9 401.65
Sep ,
06 5.2 451.1
Dec ,
06 5.07 400.05
Mar ,
07 4.63 341.55
Jun ,
07 2.54 308.2
Sep ,
07 2.53 324.1
Dec ,
07 2.43 441.2
Mar ,
08 4.52 297.65
Jun ,
08 4.38 223.85
Sep ,
08 4.44 134.7
Dec ,
08 3.63 107.15
Mar ,
09 4.46 76.45
Jun ,
NIIT LTD 05 18.23 222.35
Sep ,
05 22.35 296.25
Dec ,
05 22.35 288.75
Mar ,
06 29.88 296.4
Jun , 41.42 367.35
44
 06
Sep ,
06 41.74 330.3
Dec ,
06 39.68 525.15
Mar ,
07 38.78 696.8
Jun ,
07 40.48 1003.15
Sep ,
07 93.97 160.75
Dec ,
07 43.71 156.8
Mar ,
08 43.69 98
Jun ,
08 42.86 107.15
Sep ,
08 42.66 51.45
Dec ,
08 34.8 26.55
Mar ,
09 28.02 20.25
United Breweries Jun ,
Holdings Ltd 05 24.45 446.95
Sep ,
05 24.07 437.4
Dec ,
05 15.33 524.85
Mar ,
06 15.63 726.9
Jun ,
06 18.63 444.95
Sep , 20.61 265.45
06
45
 Dec ,
06 23.35 345.05
Mar ,
07 24.92 359.5
Jun ,
07 25.01 609.2
Sep ,
07 24.7 946.6
Dec ,
07 29.9 1243.95
Mar ,
08 28.88 717.75
Jun ,
08 28.61 318.15
Sep ,
08 27.76 227.25
Dec ,
08 27.56 108.65
Mar ,
09 24.9 75.5
Bombay Dyeing &
Manufacturing Jun ,
Company Ltd 05 11.49 336.2
Sep ,
05 14.45 383.15
Dec ,
05 14.88 372.95
Mar ,
06 14.23 595
Jun ,
06 14.49 580.75
Sep ,
06 13.91 754.95
Dec , 13.28 766.35
06
46
 Mar ,
07 14.51 540.85
Jun ,
07 13.89 573.6
Sep ,
07 13.56 675.1
Dec ,
07 9.68 755.35
Mar ,
08 6.68 614.3
Jun ,
08 6.09 581.8
Sep ,
08 5.12 371.55
Dec ,
08 3.52 193.15
Mar ,
09 1.5 167.95
Mahindra Lifespace Jun ,
Developers Ltd 05 22.29 140.1
Sep ,
05 24.9 274.3
Dec ,
05 26.49 395.9
Mar ,
06 26.73 462.2
Jun ,
06 12.96 603.9
Sep ,
06 13.23 807.9
Dec ,
06 30.69 876.3
Mar ,
07 26.99 568.3
Jun , 26.35 555.4
47
 07
Sep ,
07 22.78 618.6
Dec ,
07 22.93 843.45
Mar ,
08 21.28 413.2
Jun ,
08 21.74 426.25
Sep ,
08 23.18 342.35
Dec ,
08 26.74 178.15
Mar ,
09 25.65 132.15
TVS Motor Jun ,
Company Ltd 05 12.59 72.05
Sep ,
05 12.42 92.75
Dec ,
05 11.01 100.05
Mar ,
06 8.93 140.05
Jun ,
06 7.65 97.8
Sep ,
06 6.76 124.45
Dec ,
06 4.1 87.3
Mar ,
07 5.34 59.6
Jun ,
07 4.44 60.9
Sep , 4.41 70.05
07
48
 Dec ,
07 4.28 72.45
Mar ,
08 6 34.95
Jun ,
08 3.68 26.45
Sep ,
08 4.95 32.65
Dec ,
08 3.43 22.5
Mar ,
09 2.17 22.65
Rain Commodities Jun ,
Ltd 05 0 39.95
Sep ,
05 0 47.95
Dec ,
05 0 59.75
Mar ,
06 0 87.05
Jun ,
06 1.44 74.4
Sep ,
06 1.38 173.05
Dec ,
06 4 170.2
Mar ,
07 4.73 119.65
Jun ,
07 5.86 147.55
Sep ,
07 6.12 175.55
Dec ,
07 6.43 293.85
Mar , 6.5 195.1
49
 08
Jun ,
08 7.56 177.65
Sep ,
08 8.02 185.75
Dec ,
08 7.61 90.25
Mar ,
09 7.58 81
Table-6

50
MIDCAP & SMALLCAP INDICES VS SENSEX

51
 Ap Smallcap Index Midcap Index
r Ap
M il-2

0
r

2000
4000
6000
8000
10000
12000
14000
16000
Ju ay-200 5 M il-2

0
2000
4000
6000
8000
10000
12000

ne 00
- 5 Ju ay- 005
n 20
Se Au July2005 J e-2 05
pte gu -20
m st- 05 Se Au uly- 005
g
pt u 20
e s 0
No Octboer-2 2005 O mb t-2 5
De v em ber-005 No cto er- 00 5
ce be 200 b 2
De vem er- 00 5
Jambe r-20 5 ce be 20
Fe nua r-2 00 5 Ja mb r-2 05
br ry- 05 Fe nu aer-2 005
u 2 br ry 0 0
Maary - 006 u - 5
r 20 M ary 200
ar -2 6
Apch-206
r 0 Ap ch - 006
M il-2006 r 20
Ju ay-2 0 6 M il-2 06
ne 00 Ju ay-2006
- 6 n 0
Se Au July2006 J e-2 06
pte gu -20 Se Au uly - 006
m st- 06 pt gu 2 0
e s 0
No Octboer- 20 06 O mb t-2 6
2 No cto er- 006
De v em ber-006 v b 2
ce be 20 De em er- 00 6
Jambe r-200 06 ce be 20
Fe nua r-2 0 6 Ja mb e r-2 06
br ry 06 Fe nu a r-2 006
u - br ry 00
Maary - 2007 u - 6
rc 20 M ary 200
ar -2 7
Ap h-207
r 0 Ap ch - 00 7
r 20
M il-2 07 M il-2 07
Ju ay-2007 Ju a y- 007
ne 00 n 20
- 7

Midcap Index

M o n th
J e-2 07

Month
Se Au July2007 Se Au uly- 007
pte gu -20
m t- 07s pt gu 2 0
e s 0
No Octboer- 2 20 07 O mb t -2 7

52
No cto er- 007
De vem ber-007 v b 2
M ID CAP Vs SEN SEX

De em er- 00 7

S ensex
ce be 20 0 ce be 20
m

S m a llc a p In d e x S e n s e x
Jambe r-20 7 Ja b r-2 07
Fe nua r-200 7 Fe nu aer- 2 007

SM ALLCAP Vs SEN SEX

Graph-2
Graph-1
br ry- 07 br ry 00
u 2 u - 7
Maary - 008 M ary 20 0
r 20 a r -2 8
Apch-208 Ap ch - 00 8
r 0 r 20
Mail-2008 M il-2 08
Ju y-2 08 Ju ay- 008
ne 00 n 20
- 8 J e-2 08
Se Au July2008 Se Au uly- 008
pte gu -20 pt gu 20
m st- 08 e s 0
O mb t -2 8
No Octboer- 20 08 No cto er- 00 8
2 v 2
De vem ber-008 De ember- 008
ce be 20 ce be 20
m r-
Ja be 20 08 m r
Ja b -2 08
Fe nua r-200 8 Fe nu aer- 2 00 8
br ry 08 br ry 0 0
u - u - 8
Maary- 2009 M ary 20 0
ar -2 9
rch200 ch 00
-209 -20 9
09 09

0
0
5000

5000
10000
15000
20000
25000

10000
15000
20000
25000
Sensex Sensex
FII INVESTMENT VS MIDCAP & SMALLCAP INDICES

53
 Gross Purchase Gross Purchase
Ap Ap
M ril-2 M ril-2
a

0
0

20000
40000
60000
80000
100000
120000
140000
20000
40000
60000
80000
100000
120000
140000

Ju y-2005 Juay-2005
ne 00 n 0
Se Au Jul -20 5 Se Au Jule- 200 5
pt gu y-2 05 pt gu y-2 05
e s 0 e s 0
O m t-2 05 O m t- 0
No ctober 00 No ctober 200 5
-
De vember 20 05 De vember-20 5
ce b -20 5
e
ce b -2 05
Ja mb r-2 05 Jamb e r-2005
Fe nu e r-2 005 Fe nu e r- 00
br a ry 00 br a ry 2 0 5
u u
M ar y -20 5 M ary - 2005
ar -2 06 ar -2 06
c c
Ap h-2 006 Ap h-2006
0
M ril-2 06 M ril-2006
a
Ju y-2006 Juay-2006
ne 00 ne 0
Se Au Jul -20 6 Se Au Jul -200 6
pt gu y-2 06 pt gu y-2 06
e s 0 e s
O m t-2 06 O m t- 00
No ctober 00 No ctober 200 6
v - 6 v
De ember-20 6
De ember 20 0
ce be -20 6 ce b -2 06
m
Ja b r-2 06 J m e r- 006
Fe nu e r- 006 Feanube r- 2 00
br a ry 2 0 br a ry 2 0 6
u - 0 u
M ar y 2006 M ary -2006
ar -2 7 ar -2 07
c c
Ap h-2 007 Ap h-2007
0
M ril-2 07 M ril-2007
a

Gross Purchase
Gross Purchase
Ju y-2007 Juay-2007
ne 00 n 0

Month
Se Au Jul - 20 7 Month Se Au Jule-200 7
pt gu y-2 07
pt gu y-2 07
e s 0 e s
O m t-2 07 O m t- 00

54
No ctober 00 No c tober 200 7
- De vember-20 7
De vember 20 07
ce b -20 7
e
ce b - 2 07
Ja mb r-2 07 J m e r- 007

Graph-4
Graph-3
Fe nu e r-2 007 Feanube r- 2 00
br a ry 00 br a ry 2 0 7
u u

FII INVESTM ENT Vs SM ALLCAP

FII INVESTM ENT Vs M IDCAP

M ar y -2007 M ar y -2007

Smallcap Index close

ar -2 8 ar -2 08
c c
M idcap Index close

Ap h-2 008 Ap h-2008

0
M ril-2 08 M ril-2008
a
Ju y-2008 Juay-2008
ne 00 n 0
Se Au Jul - 20 8 Se Au Jule-200 8
pt gu y-2 08 pt gu y-2 08
e s 0 em st 00
O m t-2 08 O -
No ctober 00 No c tober 200 8
v - 8 De vember-20 8
De ember 20 0
ce be -20 8 ce b - 2 08
m r
Ja b -2 08 Jamb e r-2008
Fe nu e r- 008 Fe nu e r- 00
br a ry 2 0 br a ry 2 0 8
u - 0 u
M ar y 2008 M ary - 2008
ar -2 9 ar -2 09
ch 0 ch 0
-2 09 -2 09
00 00
9 9

0
0

2000
4000
6000
8000
2000
4000
6000
8000

10000
12000
14000
16000
10000
12000

Smallcap Index Midcap Index

VOLATILITY ANALYSIS

55
 Gross Purchases & Sales
A
pr
il-

100000
120000
140000

20000
40000
60000
80000

0
M 2 00
ay 5
Ju -20
ne 0 5
-
Ju 200
A ly- 5
S u 2
ep gus 00
te t-2 5
m 0
O ber 0 5
ct -2
N o b 00
ov e 5
e r-
D mb 200
ec e 5
em r-2
0
Ja ber 05
nu -2
Fe a r 005
br y- 2
ua 00
r
M y-2 6
ar 0
ch 06
-
A 20
pr 06
il -
M 2 00
ay 6
Ju -20
ne 0 6
-
Ju 200
A ly- 6
u
Se gu 2 0
pt st 06
em -2
0
O ber 0 6
ct -2
N o b 00
o v er
e - 6
D mb 200
ec e 6
em r-2
b 0
Ja e r 06

Gross
n -2
Fe ua r 006

Purchase
br y- 2
ua 0
r 0
M y-2 7
ar 00
ch 7
-
A 20
pr 07
i l-
M 2 00
ay 7

Month

Sales
Gross
Ju -20
ne 0 7
-
Ju 200
A ly- 7
S ugu 2 0
0

Graph-5
VOLATILITY ANALYSIS

ep
te s t-2 7
m 00
O er 7 b
c -
N to b 20 0
ov e 7
em r- 2
D 0
e c be 07
em r-2
0
Midcap Index

Ja be r 07
nu -2 0
Fe a r 07
br y- 2
ua 0
r 0
M y-2 8
ar 00
ch 8
-
A 20
pr 08
i l-
M 200
ay 8
-
Ju 20
ne 0 8
-
Smallcap Index

Ju 200
A ly- 8
S ugu 2 0
ep 0
te st-2 8
m
O er 8 b 00
c -
N to b 200
ov e
r- 8
e
D mb 200
ec e 8
em r-2
0
Ja ber 08
nu -2
Fe a r 08 0
br y-2
ua 0
r 0
M y-2 9
ar 00
ch 9
-2
00
9
0
2000
4000
6000
8000
10000
12000
14000
16000

Midcap & Smallcap Index

SCRIPWISE IMPACT OF FII SHAREHOLDING ON
PRICE MOVEMENT OF MIDCAP COMPANIES
 Percentage Shareholding Percentage Shareholding
Ju Ju
n n

0
5
10
15
20
25
30
35
40
45
50
10
15
20
25
30
35

0
5
Se , 05 S ,0
p ep 5
De , 05 D ,0
c ec 5
M , 05 M , 05
ar ar
Ju , 0 6 Ju , 0 6
n n
Se , 06 S ,0
ep 6
p
De , 06 D ,0
ec 6
c
M , 06 M , 06
ar ar
,
Ju , 0 7 Ju 0 7
n n
Se , 07 S ,0

% shareholding
ep 7
p

% shareholding
De , 07 D ,0
ec 7
c
Quarter Period
M , 07

Quarter Period
M , 07
JSW STEEL LTD.

ar ar

Graph-7
Graph-6
, Ju , 0 8
Ju 0 8
n n
S ,0
Se , 08 ep 8
p
D ,0
closing price

ec 8

UNITED PHOSPHORUS LTD.

De , 08

closing price
c M , 08
M , 08 ar
ar ,0
,0 9
9
0

0
200
400
600
800
1000
1200
1400

100
200
300
400
500
600
700
800
900
Closing Price Closing Price
 Percentage Shareholding Percentage Shareholding
Ju
n Ju

0
5
10
15
20
25
30
35
40
45
n

10
12
14

0
2
4
6
8
Se , 05 ,
p Se 05
p
De , 05 ,
c De 05
M , 05 c
ar M , 05
ar
Ju , 0 6 ,
n Ju 06
n
Se , 06 ,
p Se 06
De , 06 p
c De , 0 6
c
M , 06 ,
ar M 06
ar
Ju , 0 7 ,
n Ju 07
Se , 07 n,
p Se 07

% shareholding
De , 07 p

% shareholding
c De , 07
Quarter Period
M , 07 c,

Quarter Period
ar M 07

Graph-8
ar
Ju , 0 8
n ,
Ju 08
n
Se , 08 ,

FEDERAL BANK LTD.

p Se 08
p
De , 08 ,
closing price

c
COLGATE PALMOLIVE INDIA LTD.

De 08

closing price
M , 08 c
ar M , 08
,0 ar
9 ,0
9

0
0

50
50

100
150
200
250
300
350
400
100
150
200
250
300
350
400
450
500

Closing Price Closing Price

 Percentage Shareholding Percentage Shareholding
Ju Ju
n n

10
15
20
25
30
35
40
45
50

0
5

0
2
4
6
8
10
12
14
16
Se , 05 Se , 05
p p
De , 05 De , 05
c c
M , 05 M , 05
ar ar
, Ju , 0 6
Ju 0 6
n n
Se , 06 Se , 06
p p
De , 06 De , 06
c c
M , 06 M , 06
ar ar
, ,
Ju 0 7 Ju 0 7
n n
Se , 07 Se , 07
p p

% shareholding
% shareholding
De , 07 De , 07
c c

Quarter Period

Quarter Period
LUPIN LTD.
Graph-9

M , 07 M , 07

Graph-10
ar ar
,
Ju 0 8 Ju , 0 8
n n
Se , 08 Se , 08
p p
De , 08

closing price
De , 08
closing price

c
JAIN IRRIGATION SYSTEMS LTD.

c
M , 08 M , 08
ar ar
,0 ,0
9 9

0
0

200
400
600
800
100
200
300
400
500
600
700

1000
1200
Closing Price Closing Price
Graph-11
 Percentage Percentage Shareholding
Shareholding Ju
Ju n

0
5
10
15
20
25
30
n

0
5
10
15
20
25
30
35
Se , 05
Se , 05 p
p De , 05
De , 0 c
c 5 M , 05
M , 05 ar
ar
Ju , 0 6
Ju , 0 6
n
n
Se , 06
Se , 0
p 6 p
De , 06 De , 06
c c
M , 06 M , 06
ar ar
Ju , 0 7
Ju , 0 7
n n
Se , 07 Se , 07
p p

% shareholding
% shareholding
De , 0 De , 07
c 7 c
M , 07

Quarter Period
M , 07

Graph-13
Graph-12

VOLTAS LTD.
ar ar
Ju , 0 8 Ju , 0 8
n n
Se , 0 Se , 08
p 8 p
De , 0 De , 08
c 8

closing price
c
Quarter Periodclosing price

M , 08 M , 08
INDIAN HOTELS COM PANY LTD.

ar ar
,0 ,0
9 9

0
0

200
400
600
800
200
400
600
800

1000
1200
1000
1200
1400
1600

Closing Price Closing Price

 Percentage Shareholding Percentage Shareholding
Ju Ju
n n

0
5
10
15
20
25

0
5
10
15
20
25
30
35
Se , 05 Se , 05
p p
De , 05 De , 05
c c
M , 05 M , 05
ar ar
Ju , 0 6 Ju , 0 6
n n
Se , 06 Se , 06
p p
De , 06 De , 06
c c
M , 06 M , 06
ar ar
Ju , 0 7 Ju , 0 7
n n
Se , 07 Se , 07
p p

% shareholding

% shareholding
De , 07 De , 07
c c
M , 07 M , 07

Quarter Period

Graph-15
Graph-14

Quarter Period
ar ar

M PHASIS LTD.
Ju , 0 8
TATA TEA LTD .

Ju , 0 8 n
n
Se , 08 Se , 08
p p
De , 08 De , 08
c c
closing price

closing price
M , 08 M , 08
ar ar
,0 ,0
9 9
0

0
50
100
200
300
400
500
600
700
800
900

100
150
200
250
300
350
1000

Closing Price Closing Price

SCRIPWISE IMPACT OF FII SHAREHOLDING ON
PRICE MOVEMENT OF SMALLCAP COMPANIES
 Ju Percentage Shareholding Percentage Shareholding
n

0
1
2
3
4
5
6
7
8
9
10
Ju
n

0
5
10
15
20
25
30
35
40
45
50
Se , 05
p Se , 05
De , 05 p
c De , 05
M , 05 c
ar M , 05
ar
Ju , 0 6
n Ju , 0 6
Se , 06 n
p Se , 06
De , 06 p
c De , 06
c
M , 06 M , 06
ar
, ar
Ju 0 7 Ju , 0 7
n n
Se , 07 Se , 07
p p

% shareholding

% shareholding
De , 07 De , 07
c c

Quarter Period
M , 07

Graph-17
Graph-16
ar M , 07
ar
Ju , 0 8 ,
Ju 0 8
n n
Se , 08 Se , 08
p p
SOUTH INDIAN BANK LTD.

De , 08 De , 08
c
Quarter Period closing price

closing price
KESORAM IN DUSTR IES LTD .
M , 08 M , 08
ar ar
,0 ,0
9 9
0

0
50
100
150
200
250

100
200
300
400
500
600
700

Closing Price Closing Price

 Percentage Shareholding
Ju
n

0
5
10
15
20
25
30
35
40
Se , 05
p
De , 05
c
M , 05
ar
Ju , 0 6
n
Se , 06
p
De , 06
c
M , 06
ar
Ju , 0 7
n
Se , 07
p
De , 07

% s hareholding
c

Graph-18
Ma , 07
r
Q uarter P eriod
Ju , 0 8
n
Se , 08
p
G AM M O N IN D IA LTD .

De , 08
c
c los ing pric e
M , 08
ar
,0
9
0
100
200
300
400
500
600
700

Closing Price
 Percentage Shareholding Ju Percentage Shareholding
Ju n
n

0
2
4
6
8
10
12

0
10
20
30
40
50
60
70
80
90
100
Se , 05 Se , 05
p p
De , 05 De , 05
c c
M , 05 M , 05
ar ar
Ju , 0 6 Ju , 0 6
n n
Se , 06 Se , 06
p p
De , 06 De , 06
c c
M , 06 M , 06
ar ar
Ju , 0 7 Ju , 0 7
n n
Se , 07 Se , 07
p p

% shareholding
De , 07
% s hareholding
De , 07
c c

N IIT LTD .
M , 07 M , 07
Quarter Period

Graph-20
Graph-19

Quarter Period
ar ar
Ju , 0 8 Ju , 0 8
n n
R AYM ON D LTD .

Se , 08 Se , 08
p p
De , 08 De , 08
c c

clos ing price

clos ing pric e

M , 08 M , 08
ar ar
,0 ,0
9 9
0

0
100
200
300
400
500
600

200
400
600
800
1000
1200

Closing Price Closing Price

 Percentage Percentage Shareholding
Ju Shareholding Ju
n

0
5
10
15
20
25
30
35
n

0
2
4
6
8
10
12
14
16
Se , 05
Se , 05
p p
De , 05
De , 05
c c
M , 05 M , 05
ar ar
Ju , 0 6
Ju , 0 6
n n
Se , 06
Se , 06
p p
De , 06
De , 06
c c
M , 06 M , 06
ar ar
Ju , 0 7
Ju , 0 7
n
n
Se , 07
Se , 07
p
p

% shareholding
% shareholding
De , 07
De , 07
c
c
M , 07

Graph-22
Graph-21
Quarter Period

Quarter Period
M , 07 ar
ar

COM PANY LTD.

Ju , 0 8
Ju , 0 8
n n
Se , 08
Se , 08
p
p
De , 08
De , 08 c

closing price
closing price

c M , 08
M , 08 ar
ar ,0
,0
9 9

BOM BAY DYEING & M ANUFACTURING

UN ITED BR EWER IES HOLD IN GS LTD .

0
200
400
600
800

100
200
300
400
500
600
700
800
900
1000
1200
1400

Closing Price Closing Price

 Percentage Shareholding
Ju
n

0
5
10
15
20
25
30
35
Se , 05
p
De , 05
c
M , 05
ar
Ju , 0 6
n
Se , 06
p
De , 06
c
M , 06
ar
Ju , 0 7
n
Se , 07
p

% s hareholding
De , 07
c
M , 07

Graph-23
Quarter Period
ar
Ju , 0 8
n
Se , 08
p
De , 08
c
closing pric e
M , 08
ar
,0
9
0
M AHIN D R A LIFESPACE D EVELOPER S LTD .

100
200
300
400
500
600
700
800
900
1000

Closing Price
 Percentage Shareholding Percentage Shareholding
Ju Ju
n

0
2
4
6
8
n
10
12
14

0
1
2
3
4
5
6
7
8
9
Se , 05
Se , 05
p p
De , 05 De , 05
c c
M , 05 M , 05
ar ar
Ju , 0 6 Ju , 0 6
n n
Se , 06 Se , 06
p p
De , 06 De , 06
c c
M , 06 M , 06
ar ar
Ju , 0 7 Ju , 0 7
n n
Se , 07 Se , 07
p p

% shareholding
% s hareholding
De , 07 De , 07
c c

Graph-25
Graph-24
M , 07 M , 07

Quarter Period
Quarter Period

ar ar
Ju , 0 8 Ju , 0 8
n n
Se , 08 Se , 08
p p

RAIN COM M ODITIES LTD.

De , 08 De , 08
c c

closing price
c los ing pric e
TVS M OTOR COM PAN Y LTD .

M , 08 M , 08
ar ar
,0 ,0
9 9

0
0

50
20
40
60
80

100
150
200
250
300
350
100
120
140
160

Closing Price Closing Price

 REFERENCES

Research Papers:

 S S S Kumar 'Role of Institutional Investors in Indian Stock

Markets'
 Suresh Babu, M. and Prabheesh, K.P. (2008) ‘Causal
relationships between Foreign Institutional Investments and
stock returns in India’
 Chakrabarti, R. (2001) ‘FII flows to India: Nature and
causes’

Books:

 Chopra, C. (2003) ‘Foreign Investment in India

 Avadhani, V.A. (2004) ‘Securities Analysis and Portfolio
Management’

Websites:

 http://en.wikipedia.org/wiki/Foreign_Institutional_Investor
 http://money.rediff.com/indices/bse/bsesmallcap
 www.bseindia.com
 www.sebi.gov.in
 www.moneycontrol.com
 www.myiris.com
 www.coolavenues.com