MF holdings in listed cos at all-time high

While the share of mutual funds (MFs) in listed companies rose to another all-time high, FII holdings declined to an 11-year low. The share of domestic mutual funds in NSE-listed companies rose to another all-time high of 8.92 per cent as of March 31, 2024, from 8.81 per cent as of December 31, 2023.

This was powered by strong net inflows of Rs81,539 crore during the quarter, as per Primeinfobase, an initiative of Prime Database.

According to Pranav Haldea, Managing Director, PRIME Database Group, Indian markets are moving towards Atmanirbharta (self-reliance) with the share of DIIs set to overtake that of FIIs in the next few quarters.

“For years, FIIs have been the largest non-promoter shareholder category in the Indian market with their investment decisions having a huge bearing on the overall direction of the market. Markets would tank when FIIs would pull out. This is no longer the case. DIIs along with retail investors have now been playing a strong counterbalancing role,” he said.

On the other hand, the share of Foreign Institutional Investors (FIIs) declined to an 11-year low of 17.68 per cent as of March 31, 2024, down by 51 bps from 18.19 per cent as of December 31, 2023, resulting in the gap between FII and DII holding narrowing further to an all-time low in this quarter with DII holding now being just 9.23 per cent lower than FII holding, as per the report.

The widest gap between FII and DII holding was in the quarter ending March 31, 2015, when DII holding was a staggering 49.82 per cent lower than FII holding.

The share of private promoters declined to a 5-year low of 41 per cent as of March 31, 2024. Over the last 18 months alone, it has fallen by 361 basis points from 44.61 per cent on September 30, 2022. According to Haldea, stake sales by promoters to take advantage of bullish markets, relatively lower promoter holding in some of the IPO companies and also overall institutionalisation of the market have resulted in this.