MF And Retail Share Of NSE Stocks At All-time High, FII Share At 12-yr Low

4 min read Last Updated : Aug 05 2024 | 2:43 PM IST

Domestic mutual funds (MFs) have increasing their share of listed companies to a record high. Mutual funds are now holding a record 9.17% of companies listed on the National Stock Exchange (NSE) as of June 30, 2024. This is a significant jump from 8.93% in March 2024. This increase is driven by strong net inflows of over Rs 1 lakh crore into mutual funds during the quarter, according to data analysed by Prime Database.

LIC’s Share Dips:

Life Insurance Corp.of India (LIC), India’s largest institutional investor, on the other hand, saw its share (across 282 companies where its holding is more than 1 per cent) decreasing to an all-time low of 3.64 per cent as on June 30, 2024 from 3.75 per cent as on March 31, 2024. According to Pranav Haldea, Managing Director, PRIME Database Group, this was despite net buying by LIC of Rs 12,400 crore during the quarter. Given that LIC commands a lion’s share of investments in equities by insurance companies (at least 70 per cent share or Rs 15.72 lakh crore), the overall share of Insurance companies also went down from 5.40 per cent to 5.23 per cent during the quarter.

Domestic vs. Foreign Investors:

The combined share of all domestic institutional investors (DIIs) has reached 16.23%, up from 16.07% in March 2024.

Meanwhile, foreign institutional investors (FIIs) have been pulling money out of the Indian market. Their share dropped to a 12-year low of 17.38%. This has narrowed the gap between domestic and foreign holdings to its lowest point ever. Currently, DIIs hold just 6.60% less than FIIs.

The widest gap between FII and DII holding was in quarter ending March 31, 2015, when DII holding was a staggering 49.82 per cent lower than FII holding. The FII to DII ownership ratio also decreased to an all-time low of 1.07 as on June 30, 2024 from an all-time high of 1.99 in quarter ending March 31, 2015.

Retail investors and high net worth individuals (HNIs) are also playing a bigger role, with their combined share reaching an all-time high of 25.85%. The share of retail investors reached an all-time high of 7.64 per cent as on June 30, 2024 from 7.52 percent on March 31, 2024 while the share of HNI investors decreased slightly to 1.98 per cent as on June 30, 2024 from 2.00 percent on March 31, 2024. As such, the combined retail and HNI share increased to 9.62 per cent as on June 30, 2024 from 9.52 per cent as on March 31, 2024.

DIIs increased their allocation most to Commodities (from 7.91 per cent of their total holding as on March 31, 2024 to 8.73 per cent of their total holding as on June 30, 2024) while they decreased their allocation most to Energy (11.53 to 10.64). FIIs increased their allocation most to Consumer Discretionary (16.23 to 17.13) while they decreased their allocation most to IT (8.93 to 8.09).

The share of the Government (as promoter) increased to a seven-year high of 10.64 per cent as on June 30, 2024 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. 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 institutionalization of market has resulted in this.

21 companies that promoters, FIIs and DIIs increased their stake in during the quarter

There were 21 companies in which the trinity of Promoters, FIIs and DIIs all increased their stake during the quarter these being (in descending order by market capitalisation) ICICI Lombard General Insurance Co., Deepak Nitrite, Jindal Saw, KSB, Nava, Saregama, LT Foods, Redtape, Garware Technical Fibres, Epigral, Tide Water Oil Co., Greenply Industries, Shalby, V2 Retail, Pennar Industries, Snowman Logistics, MSP Steel & Power, Royal Orchid Hotels, Sarla Performance Fibers, Smartlink Holdings and Usha Martin Education & Solutions.

First Published: Aug 05 2024 | 2:42 PM IST