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<\/p>\nThe ownership by domestic investors, individual as well as institutional, in companies listed on the National Stock Exchange (NSE) has breached the 25 per cent mark for the first time.<\/p>\n
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The share stood at 25.72 per cent at the end of the March 2023 quarter, up from 24.44 per cent in the previous quarter, according to data from Prime Database.<\/p>\n
The share of foreign portfolio investors (FPIs), meanwhile, rose slightly to 20.56 per cent from 20.24 per cent as on December 31, 2022.<\/p>\n
Since 2015, the grip of domestic investors on the market has been tightening, while that of overseas funds, waning.<\/p>\n
FPI shareholding in the NSE-listed companies was 23.3 per cent in March 2015, while the combined holding of domestic institutional investors (DIIs), retail and high networth individuals (HNIs) was just 18.47 per cent.<\/p>\n
The rising share of domestic investors makes the Indian market less susceptible to foreign influence, experts say.<\/p>\n
This was demonstrated last year when a record $33-billion FPI outflow failed to make a big dent in domestic equities, helping the market outperform most of its global peers in 2022.<\/p>\n
“This was the sixth consecutive quarter where the combined share of domestic investors has increased.<\/p>\n
“It showcases the steadfast march of the Indian capital market towards Atmanirbharta (self-reliance),” said Pranav Haldea, managing director, Prime Database Group.<\/p>\n
DIIs’ shareholding at the end of the March 2023 quarter stood at 16.35 per cent, up from 15.32 per cent in the preceding quarter.<\/p>\n
The increase was on the back of net inflows from domestic mutual funds (MFs) to the tune of Rs 54,942 crore during the quarter.<\/p>\n
Retail holding rose to 7.48 per cent, up from 7.23 per cent, while HNI holding (those holding shares worth more than Rs 2 lakh in a company) fell marginally to 1.88 per cent from 1.89 per cent.<\/p>\n
“The gap between FPI and DII holding has decreased to its lowest level ever.<\/p>\n
“DII holding is now just 20.46 per cent lower than FPI holding.<\/p>\n
“On December 31, 2022, DII holding was 24.3 per cent lower than that of FPIs.<\/p>\n
“The widest gap between the two was at the end of March 31, 2015 at 55.45 per cent.<\/p>\n
“The FPI to DII ownership ratio has also declined to an all-time low of 1.26,” said Prime Database in a release.<\/p>\n
A closer look at DII ownership shows the dominance of MFs.<\/p>\n
The share of MFs rose for the seventh straight quarter to an all-time high of 8.74 per cent during the March quarter.<\/p>\n
Meanwhile, the share of Insurance companies increased to a six-year high of 5.87 per cent.<\/p>\n
State-owned Life Insurance Corporation (LIC) alone accounts for two-thirds of the investments of insurance companies in domestic equities.<\/p>\n
Interestingly, the promoter shareholding in privately held companies decreased to a three-year low of 41.97 per cent as on March 31, 2023, from 43.25 per cent as on December 31, 2022.<\/p>\n
Prime Database said over the past 13 years, the share of promoters in private firms has been steadily increasing from 33.6 per cent on June 30, 2009.<\/p>\n
On the other hand, the share of the government (as a promoter) in listed companies has been steadily declining from 22.48 per cent in June 2009 to 7.75 per cent at the end of the March 2023 quarter.<\/p>\n
This comes on the back of disinvestment of stakes in listed public sector undertakings (PSUs), and also the declining share of PSUs in the overall market cap.<\/p>\n