DIIs stake in Nifty 500 slips to 7-qtr low

Mumbai As foreign portfolio investors (FPIs) have increased their holding in the domestic stocks, domestic institutional investors (DIIs) have been net sellers, and their stake in Nifty-500 stocks declined to a seven-quarter low of 14.3 per cent in the March 2021 quarter, shows a brokerage analysis.

On an annualised basis, the overall FPI ownership in Nifty-500 stocks rose 160 bps to 22.3 per cent in the March quarter from 20.7 per cent in March 2020, while that of DIIs declined 50 bps to 14.2 per cent from 14.7 per cent in March 2020.

On a quarterly basis, the same FPIs saw a 20-bps decline from the December 2020 quarter, and DIIs witnessed decline by 10 bps, show data from domestic brokerage Motilal Oswal Financial Services. In the March quarter, while foreign portfolio investors pumped in $7.3 billion into domestic equities, domestic institutional funds pulled out heavily with a net outflow of $3.2 billion. It indicates that vastly divergent sequential trends are seen between FPI and DII purchases of equities, according to the report.

While FPIs increased weights in two-thirds of the sectors (telecom, metals, consumer durables, realty, and cement), DIIs trimmed weights on these sectors in particular and the overall market in general between the December and March quarters. While the overall FPI ownership in Nifty-500 grew 160 bps year-on-year to 22.3 per cent, which is at the pre-pandemic levels in the fourth quarter of 2020-21, the same saw a marginal 20 bps dip in the quarter-on-quarter. On the other hand, DII holdings in the Nifty-500 were down 10 bps quarter-on-quarter between March and December, and a larger 50 bps down year-on-year to 14.2 per cent, the report said on Wednesday.

Between December 2020 and March 2021, FPIs increased their holding in 286 of the Nifty 500 index, and in 32 of the Nifty 50 index.