Sovereign funds rethink India strategy post tame Budget

FII inflows so far for 2012 have been strong, helping the Indian markets rally. But the post budget disappointment is starting to weigh on the investment decisions of some institutional investors. World's second largest sovereign fund Norway's Government Pension Fund has halved its exposure to the Indian Market and reduced its stake in Indian companies.

Its investment in Indian stocks fell to roughly USD 1.8 billion at the end of December 2011 from around USD 3.5 billion as on December 2010.

Its total holdings in equities have also been nearly halved standing at 120 stocks on December 2011 from 246 stocks in 2010.

The fund choose to exit its investment completely in certain large-cap stocks notably Coal India , Real estate major DLF , Adani Enterprises , Bank of Baroda and Essar Oil . It has also taken money off mid-cap and small-cap banks like Allahabad Bank , Andhra Bank , Bank of Maharashtra , Syndicate bank and Oriental Bank of Commerce .

It has even trimmed its exposure in other large cap stocks including IT bellwether Infosys , Reliance , ICICI Bank and Suzlon .

Surprsingly, its stake in Unitech has risen from 0.87% to 1.17%, despite trouble between Norway's Telenor and the real estate company.