THE recent rush by foreign institutional investors (FIIs) to pick up low-priced blue-chip shares on the Bombay Stock Exchange (BSE) has hit a legal block.
Traders said a limit restricting foreign institutions' holdings to 24 per cent of issued share capital had been reached already in stock of 22 major companies, with another 12 close to the mark, as interest in the low-valued market swelled.
'We estimate that FIIs have made heavy investments in at least another 250 companies over the last 10 days,' stockbroker Parag Parikh said.
Foreign institutions revealed recently a plan to lobby the government to raise the 24 per cent ceiling to 40 per cent.
While such pivotal stocks as Reliance Industries, Bajaj Auto, ACC, State Bank and Tata group companies have been the targets of foreign institutions, the 24 per cent limit has frustrated efforts to acquire interests in smaller capitalised companies.
Vallabh Bhanshali, of merchant bankers Enam Financial Consultants, said huge share capitals of the conglomerates made it unlikely the 24 per cent ceiling would be reached in those cases.