Mumbai: Foreign institutional investors (FIIs) scaled up their holding in three leading domestic pharmaceutical companies — in Lupin by 5 per cent, Cadila Healthcare by 4 per cent and Aurobindo Pharma by 1 per cent — during the quarter ended 30 September 2003.

The rise in FIIs'' holding in Lupin was due to an increase in shareholding of HSBC Global Investment Funds and a fresh acquisition of a 2.3-per cent stake by ABN Amro Funds. During the period, the HSBC Global Investment Funds stake went up from 1.62 per cent to 3.04 per cent while ABN Amro Fund took an entry into the company with a 2.3-per cent stake.

Cadila Healthcare promoter Pankaj Ramanbhai Patel and other group firms together have offloaded a 4-per cent stake in the company in favour of FIIs. Bank of America International Investment has picked up 2-per cent stake while other FIIs have picked up less than 1-per cent stake in the company.

In Aurobindo Pharma, the FIIs have increased their stake by around 1 per cent, from 11.5 per cent to 12.7 per cent, during the quarter ended 30 September. Analysts say the continuous purchasing by FIIs kept the stock moving up in the pharma sector in the second quarter.

They add that the news that Lupin promoters are offloading a 26-per cent stake in the company had pushed the company scrip to an all-time high of around Rs 500. Similarly, Cadila Healthcare''s acquisition in France had also created a buzz in the market.

Says SBI Mutual Fund vice-president Sandip Sabharwal: "Across the spectrum, the FIIs have increased their presence considerably focusing mainly on mid-cap companies. The fundamentals of Lupin, Cadila and Aurobindo look very strong. This may be one of the reason for substantial investment in these counters by FIIs."

Says an analyst with Motilal Oswal Securities: "A large number of drugs are going off patent overseas in the coming years. Indian pharma companies propose to supply active pharmaceutical ingredients to global generic pharmaceutical firms as patents on drugs worth over $30 billion will annually expire over the next few years."