India Inc. has many more owners

Over the past few years, impressive corporate performances and strong macro-economic growth have drawn more and more investors to the Indian equity market. Result: the shareholder base of India Inc. has grown dramatically over the last year period. 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. Between April 1, 2006 and March 31, 2007, the shareholder base of Satyam increased 165 per cent from 95,356 shareholders to 252,000. Interestingly, its shareholder base in 2004 was higher, at 132,000, than in 2006. Unlike Satyam, which has seen its shareholder base rise, fall and rise again, Infosys Technologies has seen a steady rise in these numbers-it expanded 149 per cent to 489,000 (196,000). Compared to these two, Wipro and TCS have seen only a modest rise in the numbers of shareholders-of 27 per cent and 22 per cent, respectively.

Says Shriram Iyer, Head of Research, Edelweiss Securities: "Rising institutional participation and the entry of new domestic investors are pushing this trend." He, however, doesn't think the rise is particularly substantial or unprecedented. "We are at just about the same levels as in 1991, when the investor base touched almost 10 million, compared to about eight million now." Over the past four years, the number of FIIs registered with the Securities and Exchange Board of India 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. Then, the number of mutual fund investor folios has also risen to 30 million compared to around 24 million in March 2006. This goes against the conventional wisdom that the rising Sensex has not attracted many new retail investors.

Among other BSE Sensex companies, the shareholder bases of Bajaj Auto, Cipla, Hindalco, L&T, Tata Steel and M&M have increased in the range of 24-83 per cent. SBI and HDFC Bank have seen one per cent increases on this account, while ICICI Bank (-9 per cent) and HDFC (-1 per cent) have witnessed declines in the number of shareholders.