Mutual fund stake in NSE-listed cos at all time high; FPIs at 11-yr low

Mutual funds' ownership in NSE-listed companies reached an all-time high of 8.92 per cent in three months ended March 2024 propelled by net inflows of Rs 81,539 crore during the quarter, according to primeinfobase.com, an initiative of Prime Database Group. In comparison, the holding of mutual funds was at 8.81 per cent in the quarter ended December 2023.

LIC, the single-largest domestic institutional investor, saw its share (across 280 companies where it owns more than 1 per cent) increasing to 3.75 per cent as of March 2024 from 3.64 per cent as of December 2023.

The share of Domestic Institutional Investors (DIIs), which includes domestic mutual funds, insurance companies, banks, financial institutions, pension funds, Non-Banking Financial Companies (NBFCs) as a whole increased to 16.05 per cent in the quarter under review from 15.96 per cent in the preceding quarter.

This increase was on the back of a huge inflow of Rs 1.08 lakh crore.

On the other hand, the share of Foreign Portfolio Investors' (FPIs) declined to an 11-year low of 17.68 per cent as of March 2024, down from 18.19 per cent as on December 2023, resulting in the gap between FPI and DII holding narrowing to an all-time low with DII holding now being just 9.23 per cent lower than FPI holding.

The widest gap between FPI and DII holding was in the quarter ended March 31, 2015, when DII holding was at 49.82 per cent.

"Indian markets are moving towards Atmanirbharta (self-reliance) with the share of DIIs set to overtake that of FPIs in the next few quarters," Pranav Haldea, Managing Director, PRIME Database Group, said.

This analysis is based on shareholding patterns filed by 1,956 of the total 1,989 companies listed on NSE for the quarter ended March 2024. As of April 22, as many as 33 companies were still to file their shareholding data.

Meanwhile, the ownership of Government as a promoter increased to a 7-year high of 10.38 per cent in three months ended March this year fuelled by the strong performance of several PSUs. On the other hand, the share of private promoters declined to a five-year low of 41 per cent as of March 31, 2024.

The 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 the market has resulted in this, Haldea said. Further, retail investors' holding decreased marginally to 7.50 per cent as on March 31, 2024, from 7.58 per cent in the preceding quarter.