Share of retail investors’ (individuals with up to Rs 2 lakh investment) shareholding in companies listed on the NSE reached an all-time high of 7.42 per cent as on March 31, 2022, from 7.33 per cent on December 31, 2021, according to Primeinfobase.com. In Indian rupee value terms, too, retail holding in NSE companies reached an all-time high of Rs 19.16 lakh crore from Rs 19.05 lakh crore on December 31, 2021, an increase of 0.56 per cent.
The share of high networth individuals (HNIs) (those with more than Rs 2 lakh investment) in NSE companies has declining marginally to 2.21 per cent from 2.28 per cent, but the combined retail and HNI share reached an all-time high of 9.64 per cent.
In contrast is the record outflow from Foreign Portfolio Investors (FPIs). “Net outflows from FPIs, a huge Rs 1.1 lakh crore during the quarter, resulted in their share declining further to a nine-year low of 20.15 per cent as on March 31, 2022, from 20.71 per cent on December 31, 2021,” says Pranab Haldea, managing director, Prime Database.
Most notably, FPIs pulled out Rs 69,370 crore from the financial services and software sectors during the quarter, while investing Rs 13,450 crore in metals and mining and food, beverages and tobacco. FPIs’ holding in NSE companies stood at Rs 51.99 lakh crore as on March 31 this year, a decrease of 3.36 per cent from Rs 53.80 lakh crore on December 31, 2021.
DII Share Rises
According to Haldea, share of domestic mutual funds in companies listed on NSE rose for the third quarter running and reached 7.75 per cent end-March. This is up from 7.46 per cent as on December 31, 2021. This has come after five quarters of consecutive decline from March 31, 2020 (7.96 per cent) to June 30, 2021 (7.24 per cent).
The share has increased on the back of net inflows by domestic mutual funds of a huge Rs 67,423 crore during the quarter. In rupee value terms too, the holding of domestic mutual funds went up by 3.08 per cent to an all-time high of Rs 19.99 lakh crore as on March 31, 2022 from Rs 19.39 lakh crore on December 31, 2021.
The share of retail, HNI and domestic mutual funds put together also reached an all-time high of 17.38 per cent from 17.08 per cent during the same period.
Share of domestic institutional investors (DIIs), which includes domestic mutual funds, insurance companies, banks, financial institutions, pension funds etc., as a whole, also increased to 13.70 per cent from 13.21 per cent at the end of December 2021. This happened on the back of net inflows from DIIs to the tune of about Rs 1.04 lakh crore during the quarter. In rupee value terms, DII holding too went up to an all-time high of Rs 35.35 lakh crore, an increase of 3.05 per cent over the last quarter.
The gap between FPI and DII holdings decreased in this quarter, with DII holding now being 32 per cent lower than FPI holding. The widest gap between these was in the quarter ending March 31, 2015, when DII holding was 55.46 per cent lower than FPI holding. Over a 12-year period (since June 2009), FPI share has increased from 16.03 per cent to 20.15 per cent while DII share has increased from 11.39 per cent to 13.70 per cent as on May 4, 2022.
Haldea adds that the share of retail, HNIs and DIIs as a whole reached an all-time high of 23.34 per cent as on March 31, 2022, well above FPI share of 20.15 per cent showcasing further the rise of the domestic individual investor and the huge counter balancing role he has played to foreign investors. To also put this in perspective, as on March 31, 2015, FPI share was 23.32 per cent while the combined share of retail, HNI and DII was just 18.47 per cent.
