scorecardresearchDomestic investors overtake FPIs as shareholders for the first time since 2010: Report

Domestic investors overtake FPIs as shareholders for the first time since 2010: Report

Updated: 28 Jul 2022, 10:17 AM IST
TL;DR.
According to BS, since 2014, FPI ownership in top-75 companies has declined by 232 basis points to 24.8 percent.
According to BS, since 2014, FPI ownership in top-75 companies has declined by 232 basis points to 24.8 percent.

According to BS, since 2014, FPI ownership in top-75 companies has declined by 232 basis points to 24.8 percent.

After the massive sell-off since October, foreign portfolio investors (FPIs) are no longer the biggest non-promoter-shareholders in top Indian companies, a report by Business Standard said. It added that this has happened for the first time in over a decade.

“At 25.6 percent ownership of India's largest 75 companies, domestic investors are now larger holders than FPIs for the first time since 2010,” It noted quoting a Morgan Stanley report.

According to BS, since 2014, FPI ownership in top-75 companies has declined by 232 basis points to 24.8 percent. On the other hand, domestic mutual funds (MFs) have increased their ownership by a massive 580 bps to 9.5 percent and individual investors by 157 bps to 9 percent, it pointed out.

The shareholding of domestic financial institutions, which includes insurers and banks, has also slipped 17 bps to 7.1 percent, the report further informed.

All the three (MFs, Individual investors and financial institutions) combined own a little over a fourth of the top 75 companies, as per the BS report.

Meanwhile, it said that Indian promoters remain the biggest shareholders with a 44.9 percent stake. Given their growing clout, Morgan Stanley handed over the baton of ‘price setters’ to domestic investors, added BS.

Among stocks, the biggest buy for FPI has been Ashok Leyland while the biggest sell has been Zee. However, Zee was the biggest buy of MFs, who sold IndusInd Bank the most.

Continuing their massive selling spree for the ninth consecutive month foreign investors have dumped Indian shares worth 1,368 crore in July. In June this figure was 50,203, the highest net outflow in over two years -- amid aggressive rate hike by the US Federal Reserve, elevated inflation and relatively higher valuation of domestic equities.

Foreign portfolio investors (FPIs) have now pulled out around 2.2 lakh crore from domestic equities in 2022 so far - the highest-ever net withdrawal by them. Before that, FPIs withdrew 52,987 crore in the entire 2008, data with depositories showed.

Analysts have warned that FPI flows are likely to remain volatile in the near term.

Article
Foreign portfolio investors (FPIs) have been on a selling spree in the Indian market, exceeding the global financial crisis (GFC) outflow of 2008-09. However, the market benchmark Sensex has not reacted to the FPI selling as it used to in the past. Data from NSDL show that FPIs have sold equities worth 1,41,507 crore in the Indian equities in the financial year 2022 (FY22) so far. Cumulatively, they have withdrawn 1,19,950 crore from the Indian financial market instruments, which includes equities, debt, debt-VRR (voluntary retention route) and hybrid category. The data show, FPIs have sold only equities and bought in debt, debt-VRR and hybrid categories in FY22 so far.
First Published: 28 Jul 2022, 10:17 AM IST