DII-FPI shareholding gap narrows to all-time low in September quarter

Domestic investors are tightening their grip on the ownership of listed companies.

The gap between the shareholding of domestic institutional investors (DIIs) and foreign portfolio investors (FPIs) narrowed to 13.11 percentage points at the end of the September 2023 quarter.

At the peak, the gap was nearly 50 percentage points in March 2015, according to an analysis by Prime Database, a leading provider of data on the capital market.

Meanwhile, the value of DII holdings for the first time has crossed the Rs 50 trillion mark led by a sharp upmove in stocks in the small and midcap space.

“The share of DIIs as a whole decreased to 15.99 per cent as on September 30, 2023 from 16.05 per cent as on June 30, 2023.

“However, in the Nifty500 and Nifty200 universe, the DII share went up from 16.57 per cent to 16.7 per cent and from 17.12 to 17.51 per cent respectively,” said Prime Database in a release.

During the September 2023 quarter, domestic MFs pumped Rs 53,715 crore into domestic stocks, insurance companies and banks yanked out nearly Rs 24,000 crore and Rs 10,400 crore respectively.

The share of retail investors (individuals with up to Rs 2 lakh shareholding in a company) in companies listed on the NSE increased to an all-time high of 7.62 per cent as on September 30, 2023 from 7.50 per cent on June 30, 2023.

Retail investors bought a net of Rs 7,596 crore during the quarter.

FPI ownership declined to 18.40 per cent, down by 56 bps from 18.96 per cent as on June 30, 2023.

The fall was despite net inflows of Rs 44,113 crore from FPIs during the quarter.

The shareholding of domestic MFs rose to 8.73 per cent as on September 30, 2023, from 8.63 per cent as of June 30, 2023.

The share of high net worth individuals (individuals with more than Rs 2 lakh shareholding in a company) increased to 2.05 per cent as of September 30, 2023 from 1.95 per cent on June 30, 2023.

The share of high net worth individuals (HNIs) (individuals with more than Rs 2 lakh shareholding in a company) increased to 2.05 per cent as of September 30, 2023 from 1.95 per cent on June 30, 2023.

As such, the combined retail and HNI share reached an all-time high of 9.68 per cent as of September 30, 2023, up from 9.44 per cent as on June 30, 2023.

The share of the government (as promoter) increased as well to a five-year high of 8.79 per cent as on September 30, 2023.

“The share of the government has declined considerably, from 22.48 per cent as on June 30, 2009, primarily due to the government’s divestment programme, not enough new listings as also lackluster performance of many PSUs relative to their private peers,” said Pranav Haldea, managing director, Prime Database.

The share of private promoters declined to a four-year low of 41.55 per cent as of September 30, 2023.

Over the last year alone, it has fallen by 306 basis points from 44.61 per cent on September 30, 2022.

“Stake sales by promoters to take advantage of bullish markets, relatively lower promoter holding in companies getting listed and also overall institutionalisation of the market has resulted in this,” Haldea added.

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