Data by primeinfobase shows that the share of domestic mutual funds (MFs) in NSE-listed companies touching an all-time high of 8.81% at the end of the December quarter, up from 8.73% as on September 30. The rise in holdings was powered by a net inflow of Rs 58,198 crore during the quarter.
However, Life Insurance Corporation of India’s (LIC’s) share declined to an all-time low of 3.64% as on December 31 from 3.73% as on September 30. This was across the 277 entities in which its holding exceeds 1%. LIC is the country’s largest institutional investor. According to Pranav Haldea, MD of PRIME Database Group, this was primarily on account of profit-booking to take advantage of the bullish markets.
Insurance companies sold a net Rs 15,622 crore during the quarter, mostly attributable to LIC as it commands a substantial chunk of investments by insurers in Indian equities (close to 68% share or Rs 13.02 trillion).
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Overall, the share of domestic institutional investors or DIIs fell marginally to 15.96% in the quarter from 15.99% in September. This was despite net inflows of Rs 54,925 crore recorded during the quarter.
The share of foreign institutional investors (FIIs) also declined to 18.19%, down 21 bps from 18.40% as of September, despite net inflows of Rs 50,588 crore.
The combined share of institutional investors (both FIIs and DIIs) declined to 34.15% from 34.39%.
In what could be a sign towards DIIs gradually overtaking FIIs in the next few quarters, the gap between holdings by the two categories narrowed to an all-time low, with DII holding now just 12.23% lower than the FII holding. The widest gap was in the quarter ended March 31, 2015, when DII holding was 49.82% lower than the FII holding.
Sectorally, both DIIs and FIIs increased allocation in utilities the most and decreased the most in financial services.
The share of DIIs in utilities rose from 2.93% to 3.31%, and for FII from 3.40% to 3.84%. At the same time, allocation in financial services was down from 27.60% to 26.92% for DIIs and from 31.90% to 30.90% for FIIs.
Meanwhile, the share of the government (as a promoter) increased to a six-year high of 9.38% on the back of the strong performance of several PSUs, including LIC (BSE PSU index rose 23% against a 10% rise in the benchmark Sensex).
Broadly, over a 15-year period, the share of the Government has declined considerably, from 22.48% as on June 30, 2009, primarily due to the government’s divestment programme and not enough new listings, according to PRIME.
On the other hand, the share of private promoters declined to a 5-year low of 41.31% as on December 31, 2023. Over the last one year alone, it has fallen 330 bps from 44.61% on September 30, 2022.
Haldea said stake sales by promoters to take advantage of bullish markets, relatively lower promoter holding in some of the companies now coming out with IPOs and getting listed, as well as the overall institutionalisation of the market, have resulted in this.
The share of retail investors (individuals with up to Rs 2 lakh shareholding in a company) decreased marginally to 7.57% in December from 7.62% percent in September.
Retail investors sold a net Rs 12,163 crore during the quarter. Meanwhile, the share of HNIs (individuals with more than Rs 2 lakh shareholding) increased slightly to 2.06% from 2.05% in September.
The combined retail and HNI share declined to 9.63% in December from 9.68% in September. The combined retail, HNI and MF share, however, reached an all-time high of 18.44%.