Marking a structural shift in the shareholding pattern of listed companies in India, the dominance of domestic investors touched an all-time high in the December quarter on Dalal Street, shows a study.
"This was the fifth consecutive quarter where the holding has increased, up from 22.37 per cent as on September 30, 2021 and showcases the rising dominance of domestic investors. Net inflows from DIIs stood at Rs 27,134 crore during the quarter," said Pranav Haldea, Managing Director, PRIME Database Group, in the report.
Following the FII inflow of Rs 47,349 crore during the quarter, the share of foreign institutional investors rose to 20.18 per cent as on December 31, 2022, up by 20 bps from 19.98 per cent as on September 30, 2022.
As a result, the DII holding is now just 24.09 per cent lower than the FII holding.
To put this in perspective, as on March 31, 2015, the FII share was 23.30 per cent while the combined share of DII, retail and HNI was just 18.47 per cent.
"The FII to DII ownership ratio also declined to an all-time low of 1.32 as on December 31, 2022, down marginally from 1.33 as on September 30, 2022. Over a 13-year period (since June 2009), FII share has increased from 16.02 per cent to 20.18 per cent while DII share has increased from 11.38 per cent to 15.32 per cent," PRIME Database said.
However, FIIs remain the largest non-promoter shareholders in the Indian market and their investment decisions have a huge bearing on the stock prices and overall direction of the market.
On the back of net inflows by domestic MFs of Rs 22,698 crore during the quarter, the share of domestic MFs in companies listed on NSE rose for the sixth quarter running and reached an all time high of 8.09 per cent as on December 31, 2022, up from 7.97 per cent as on September 30, 2022.
MFs increased their exposure to financial services and industrial sectors while trimming down their exposure to utilities and diversified, the report said.
The share of retail investors (individuals with up to Rs 2 lakh shareholding in a company) in companies listed on NSE declined marginally to 7.23 per cent in Q3 from 7.34 per cent in the previous quarter.
Share of HNIs (individuals with more than Rs 2 lakh shareholding in a company) in companies listed on NSE also declined to 1.89 per cent in Q3 from 1.90 percent in Q2.
The share of private promoters in companies listed on the NSE decreased to a 3-year low of 43.25 per cent as on December 31, 2022, from 44.59 per cent on September 30, 2022.
There were 11 companies in which the trinity of promoters, FIIs and DIIs all increased their stake during the quarter - Natco Pharma, Vardhman Textiles, Granules India, Garware Technical Fibres, Hikal, Kaveri Seed Co., Power Mech Projects, Marksans Pharma, Bajaj Healthcare, Pitti Engineering and S.P. Apparels.
