Share of Domestic Institutional Investors (DIIs) along with retail and High Net-worth Individual (HNI) investors reached another all-time high of 24.44 per cent as on December 31, 2022 from 24.25 per cent on September 30, 2022, as per Primeinfobase, an initiative of Prime Database Group.
According to Pranav Haldea, Managing Director, Prime Database Group, this was the fifth consecutive quarter where the holding has increased, having come up from 22.37 per cent as on September 30, 2021, and showcases the rising dominance of domestic investors.
Net inflows from DIIs stood at Rs 27,134 crore during the quarter.
Meanwhile, net inflows from Foreign Institutional Investors (FIIs) of Rs 47,349 crore during the quarter resulted in FII share increasing to 20.18 per cent as on December 31, 2022, up by 20 bps from 19.98 per cent as on September 30, 2022.
According to Haldea, a structural shift in relation to foreign and domestic investors has taken place in the Indian market. To put this in perspective, as on March 31, 2015, FII share was 23.30 per cent while the combined share of DII, retail and HNI was just 18.47 per cent.
Following from the above, the gap between FII and DII holding decreased to its lowest level in this quarter, DII holding now being just 24.09 per cent lower than FII holding (on September 30, 2022, DII holding was 24.87 per cent lower than FII holding). The widest gap between FII and DII holding was in quarter ending March 31, 2015, when DII holding was 55.45 per cent lower than FII holding. The FII to DII ownership ratio also declined to an all-time low of 1.32 as on December 31, 2022, down marginally from 1.33 as on September 30, 2022.
Over a 13-year period (since June 2009), FII share has increased from 16.02 per cent to 20.18 per cent while DII share has increased from 11.38 per cent to 15.32 per cent.
Share of domestic mutual funds (MFs) in companies listed on NSE rose for the sixth quarter running and reached an all time high of 8.09 per cent as on December 31, 2022, up from 7.97 per cent as on September 30, 2022. This was after five quarters of consecutive decline from March 31, 2020 (7.96 per cent) to June 30, 2021 (7.25 per cent). The share has increased on the back of net inflows by domestic MFs of Rs 22,698 crore during the quarter.
In INR value terms, the holding of domestic MFs went up by 5.54 per cent to Rs 22.33 lakh crore as on December 31, 2022 from Rs 21.16 lakh crore on September 30, 2022 (Sensex and Nifty increased by 5.95 and 5.91 per cent, respectively, during this period). MFs increased their exposure to financial services and industrials sectors while trimming down their exposure to utilities and diversified.
Share of insurance companies as a whole also increased to a five-year high of 5.65 per cent as on December 31, 2022 up from 5.57 per cent as on September 30, 2022.
LIC continues to command a lion’s share of investments in equities by insurance companies (at least 70 per cent share or Rs 10.91 lakh crore). LIC’s share (across 268 companies where its holding is more than 1 per cent), increased to 3.95 per cent as on December 31, 2022 from 3.87 per cent as on September 30, 2022.
Share of DIIs as a whole thus increased to an all time high of 15.32 per cent as on December 31, 2022 from 15.01 per cent as on September 30, 2022. In INR value terms, DII holding also went up to Rs 42.28 lakh crore as on December 31, 2022, an increase of 6.07 per cent over the last quarter.
Share of retail investors (individuals with up to Rs 2 lakh shareholding in a company) in companies listed on NSE declined marginally to 7.23 per cent as on December 31, 2022, from 7.34 as on September 30, 2022.