The ownership by domestic investors, individual as well as institutional, in companies listed on the National Stock Exchange (NSE) has breached the 25 percent mark for the first time, informed a report by Business Standard.
Quoting data from Prime Database, the report mentioned that their share stood at 25.72 percent at the end of the March 2023 quarter, up from 24.44 percent in the previous quarter. Meanwhile, the share of foreign portfolio investors (FPIs), also rose slightly to 20.56 percent in the March quarter from 20.24 percent as on December 31, 2022, it added.
Since 2015, the report observed, the grip of domestic investors on the market has been tightening, while that of overseas funds has been waning. FPI shareholding in the NSE-listed companies was 23.3 percent in March 2015, while the combined holding of domestic institutional investors (DIIs), retail and high net worth individuals (HNIs) was just 18.47 percent, it informed.
As per experts, this is a good thing as the rising share of domestic investors makes the Indian market less susceptible to foreign influence, it said.
“This was the sixth consecutive quarter where the combined share of domestic investors has increased. It showcases the steadfast march of the Indian capital market towards Atmanirbharta (self-reliance),” Pranav Haldea, managing director, Prime Database Group, was quoted as saying.
The report further informed that DII's shareholding at the end of the March 2023 quarter stood at 16.35 percent, up from 15.32 percent in the preceding quarter. The increase was on the back of net inflows from domestic mutual funds (MFs) to the tune of ₹54,942 crore during the quarter. Meanwhile, retail holding rose to 7.48 percent, up from 7.23 percent, it added.
“The gap between FPI and DII holding has decreased to its lowest level ever. DII holding is now just 20.46 percent lower than FPI holding. On December 31, 2022, DII holding was 24.3 percent lower than that of FPIs. The widest gap between the two was at the end of March 31, 2015, at 55.45 percent. The FPI to DII ownership ratio has also declined to an all-time low of 1.26,” Prime Database was quoted as stating.