Institutional investors, both domestic as well as foreign, seem to have bet heavy on

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Infosys in the December quarter, if one were to go by the disclosed shareholding data for the October-December quarter 2011.

The IT bellwether, which is scheduled to announce its third quarter results this Thursday, has seen large institutions such as the government of Singapore and Oppenheimer Developing Markets Fund hiking their stakes during the third quarter. According to the latest shareholding pattern announced by the company on Tuesday, institutional investors raised holding in the IT major to 54.85 per cent in the December quarter from 47.38 per cent in the September quarter.

Institutions seem to have bought at a time when there is a steep drop in holdings of corporate bodies in Infosys from 8 per cent at the end of the September quarter to less than 1 per cent at the end of the December quarter. While holding of foreign institutional investors (FIIs) in the company rose to 37.36 per cent in the third quarter from 33.66 per cent earlier, domestic institutional investors (DIIs) seemed more optimistic on the stock during the quarter. Data reveals DIIs raised their stake in the second largest IT company to 17.49 per cent during the quarter gone by from 10.72 per cent in the preceding quarter.

However, not all DIIs remained bullish on the scrip. LIC, the biggest domestic investor, reduced its stake in Infosys to 5.17 per cent in the December quarter from 5.49 per cent in the September quarter.

“We expect Infosys to give stronger result as compared to larger cap peers, whereas HCL Tech is likely to report strong quarter in terms of volume growth, with improvement in margins,” said Shashi Bhushan, an analyst with Prabhudas Lilladher.