FPI share in NSE companies declines to 12-year low, MF share at fresh high

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The share of domestic Mutual Funds (MFs) in companies listed on the NSE rose to another all-time high of 9.17 per cent as on June 30, from 8.93 per cent a quarter ago, on the back of robust inflows totalling over ₹1 lakh crore, as per primeinfobase.com, an initiative of PRIME Database Group.

The holding of domestic institutional investors (DIIs) rose to 16.23 per cent during the quarter. Life Insurance Corporation of India (LIC), however, saw its share across 282 companies decreasing to an all-time low of 3.64 per cent.

The share of retail investors reached an all-time high of 7.64 per cent, while the share of HNI investors decreased slightly to 1.98 per cent as on June 30.

The share of foreign portfolio investors (FPIs) declined to a 12-year low of 17.38 per cent in June, down by 34 bps from 17.72 per cent a quarter ago. This has resulted in the gap between FPI and DII holding narrowing to its lowest ever. The FPI to DII ownership ratio decreased to an all-time low of 1.07 as on June 30, from an all-time high of 1.99 in quarter ending March 2015.

Self-reliance

According to Pranav Haldea, Managing Director, PRIME Database Group, Indian markets are rapidly moving towards self-reliance with the share of DIIs set to overtake that of FPIs in the next few quarters. “For years, FPIs have been the largest non-promoter shareholder category in the Indian market with their investment decisions having a huge bearing on the overall direction of the market. This is no longer the case. DIIs along with retail and high net worth Individuals have now been playing a strong counter-balancing role with their share reaching an all-time high of 25.85 per cent as on June 30,” he said.

DIIs increased their allocation most to Commodities to 8.73 per cent of their total holding, while they decreased their allocation most to Energy to 10.64 per cent of their holding. FPIs increased their allocation most to Consumer Discretionary (17.13 per cent) and decreased their allocation most to IT (8.09 per cent).

The share of the Government (as promoter) increased to a 7-year high of 10.64 per cent as on June 30 on the back of strong performance of several PSUs. On the other hand, the share of private promoters declined to a 5-year low of 40.88 per cent as on June 30, 2024. Over the last 10 quarters alone, it has fallen by 428 basis points from 45.16 per cent on December 31, 2021. According to Haldea, stake sales by promoters to take advantage of bullish markets, relatively lower promoter holding in some of the IPO companies and also overall institutionalisation of market has resulted in this.