Retail investors’ holdings in listed firms at all-time high

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Holdings of retail investors (individuals with up to Rs 2 lakh shareholding) in companies listed on the NSE have reached an all-time high of 7.18% as of June 30, 2021 against 6.96% in the preceding quarter ended March 31, as per primeinfobase.com, an initiative of PRIME Database Group. In rupee terms, retail holding in listed companies on the exchange also reached an all-time high of Rs 16.18 lakh crore from Rs 13.94 lakh crore on March 31, 2021, registered an increase of 16% (Sensex and Nifty rose by 6.0% and 7.02% respectively during this period).

According to Pranav Haldea, managing director, PRIME Database Group, a buoyant secondary market and a flurry of new listings have helped in channelising retail savings into the capital market.

HNIs shareholding

On the other hand, holdings of high net worth individuals (HNIs) (individuals with more than Rs 2 lakh shareholding), in companies listed on NSE also increased to 2.10% as on June 30, 2021 from 1.98% on March 31, 2021, taking the combined retail and HNI holding to an all-time high of 9.28%.

MF shareholding

Shareholding of domestic mutual funds in companies listed on NSE, however, reduced marginally to 7.25% as on June 30, 2021 from 7.26% as on March 31, 2021. “Holding of mutual funds has now declined for five consecutive quarters, after 24 quarters of continuous rise (from 2.80% as on March 31, 2014 to 7.96% as on March 31, 2020),” Haldea said.

The holding has fallen despite net inflows by domestic mutual funds of Rs 12,069 crore during the quarter. In rupee value terms though, the holding of mutual funds went up by 12.30% to an all time high of Rs 16.33 lakh crore as on June 30, 2021 from Rs 14.54 lakh crore on March 31, 2021.

Direct investing or MF

Haldea added that these trends also show the willingness and preference of individual investors to invest directly, rather than indirectly via mutual funds.

LIC holdings

Insurance behemoth LIC’s holding (across 295 companies where its holding is more than 1% stake) declined to 3.74% as on June 30, 2021, down from 3.83% as on March 31, 2021 and from all-time high of 5% as on June 30, 2012. In rupee terms though, it reached an all-time high of Rs 8.43 lakh crore in quarter ending June 30, 2021, an increase of 9.88% over previous quarter. LIC also continues to command a lion’s share of investments in equities by insurance companies (76% share).

Holding of insurance companies as a whole also declined to a 5 year low of 4.89% as on June 30, 2021 down from 5.06% as on March 31, 2021. In rupee value terms, it went up by 8.77% from the previous quarter to an all time high of Rs 11.03 lakh crore as on June 30, 2021.

On the back of a decrease in holdings of mutual funds and insurance companies, holding of domestic institutional investors (DII), which includes domestic mutual funds, insurance companies, banks, financial institutions, pension funds etc, as a whole, also decreased to an 11 quarter low of 13.19% as on June 30, 2021 from 13.42% as on March 31, 2021, despite net inflows from DIIs of Rs 20,199 crore during the quarter. In rupee value terms, DII holding went up to an all time high of Rs 29.72 lakh crore as on June 30, 2021, an increase of 10.53% over the last quarter.

FPI shareholding

Holding of foreign portfolio investors (FPIs) also declined to 21.66% as on June 30, 2021, from 22.46% as on March 31, 2021. Net inflows from FPIs stood at Rs 4601.53 crore during the quarter. In rupee value terms, FPI ownership also reached an all-time high of Rs 48.82 lakh crore as on June 30, 2021, up 8.46% from Rs 45.01 lakh crore as on March 31, 2021.

Institutional shareholding

Overall, total institutional ownership including FPI and DII also declined to 34.85% from 35.88%. The gap between FPI and DII holding decreased in this quarter, DII holding now being 39.11% lower than FPI holding (On March 31, 2021, DII holding was 40.25% lower than FPI holding). The widest gap between FPI and DII holding was in quarter ending March 31, 2015, when DII holding was 55.44% lower than FPI holding. Over a 12-year period (since June 2009), FPI ownership has increased from 16.02% to 21.66% while DII ownership has increased from 11.39% to 13.19%.

Top 10 companies

The top 10% firms by market capitalisation accounted for 90.76% of overall FPI holding as on June 30, 2021 (down from 91.42% on March 31, 2021), 84.38% of overall DII holding (down from 85.55% on March 31, 2021) and 81.35% of overall MF holding (down from 82.50% on March 31, 2021), showing high levels of concentration in holdings of institutional investors. The percentage holding of the government (as promoter) in companies listed on NSE increased to a one year high of 6.05% as on June 30, 2021, from 5.70% as on March 31, 2021, primarily due to a huge run up in PSU stock prices. Over a 12-year period (since June 2009) though, the holding has been steadily declining, from 22.46% as on June 30, 2009, due to the government’s divestment programme, not enough new listings as also lackluster performance of many CPSEs relative to their private peers.

Promoter holdings

The percentage holding of private promoters in companies listed on NSE increased to 44.42% from 44.09 per cent. Over a 12-year period (since June 2009), private promoter ownership has been steadily increasing, having increased from 33.60% on June 30, 2009. In rupee value terms, private promoter holding in companies listed on NSE has gone up over 7 times to Rs 100.12 lakh crore from just Rs 14.51 lakh crore on June 30, 2009, of course, aided by new listings too.

There were 11 companies in which the trinity of promoters, FPIs and DIIs all increased their stake during the quarter these being SBI Cards & Payment Services, Tanla Platforms, Lux Industries, Jindal Stainless (Hisar), Bharat Rasayan, Suprajit Engineering, NIIT, Globus Spirits, Panama Petrochem, Thangamayil Jewellery and Vikas Lifecare.