Morgan, Merrill, Citigroup sell stakes in Indian cos

Even as Japanese investment bank Nomura extended a lifeline by agreeing to buy the India operations of Lehman Brothers, the bankrupt US investment bank is holding on to its stake in many Indian companies, especially in infrastructure. However, its peer Morgan Stanley, which decided to convert itself into a bank holding company following US financial crisis, is selling stakes big time. An analysis of select stocks show that apart from Morgan, Merrill Lynch, Citigroup and Goldman Sachs too have been selling stakes in Indian companies. Morgan, which was the largest FII investor in S Kumars Nationwide, a leading textile firm with a 7.92% holding (as on June 30) sold 6.13% (1.31 crore shares) of that stake on September 18. It has offloaded 15 lakh shares in Lakshmi Energy and Foods on the same day bringing its stake down from 4.06% to 2.37%. Citigroup reduced its exposure in Ruchi Soya from 3.64 % to 2.63 % by selling 19.02 lakh shares on August 8. Goldman Sachs, another ibank that escaped the global meltdown, pared down its exposure in Prajay Engineers from 5.02% to 2.64% by selling 9.47 lakh shares on June 30. Merrill Lynch, which was taken over by Bank of America amidst the turmoil, brought down its stake in Panacea Biotech from 3.95% (as on June 30) to 1.35% by selling 18.69 lakh shares on September 23. Lehman, on the other hand, has held on to its stakes in KSK Energy, KPIT Cummins, Cranes Software and Fedders Lloyd. In some cases, companies had to come out with clarifications stating that they have not taken any hit as a result of Lehman going down under. Hyderabad-based KSK Energy had said that the i-bank cannot sell any of its holdings as the shares have a one year lockin from July 5, 2008.