The share of domestic Mutual Funds (MFs) in companies listed on NSE reached an all-time high of 8.81 percent as of December 31, 2023, compared to 8.73 percent as of September 30, 2023. This increase was fueled by robust net inflows of Rs 58,198 crore during the quarter, according to data from Primeinfobase, an initiative of the PRIME Database Group.
Conversely, Life Insurance Corporation (LIC) of India, the country's largest institutional investor, witnessed a decline in its share across 277 companies where its holding exceeds 1 percent, dropping to an all-time low of 3.64 percent as of December 31, 2023, from 3.73 percent as of September 30, 2023.
Pranav Haldea, Managing Director of the PRIME Database Group, attributed this decline to profit booking aimed at capitalizing on bullish market conditions. Insurance companies collectively sold a net of Rs 5,622 crore during the quarter, with a significant portion attributable to LIC, which commands a substantial portion of equity investments by insurance companies, amounting to at least 68 percent share or Rs 13.02 lakh crore.
Domestic Institutional Investors (DIIs) appear poised to surpass Foreign Institutional Investors (FIIs) in the coming quarters. The gap between FII and DII holdings has narrowed to an all-time low, with DII holdings now just 12.23 percent lower than FII holdings. This represents a significant shift from previous years, with the widest gap occurring in the quarter ending March 31, 2015, when DII holdings were 49.82 percent lower than FII holdings.
Meanwhile, the share of the Government as a promoter increased to a 6-year high of 9.38 percent as of December 31, 2023, driven by the strong performance of several Public Sector Undertakings (PSUs), including LIC. However, over a 15-year period, the share of the Government has declined considerably, from 22.48 percent as of June 30, 2009, primarily due to the Government's divestment program and insufficient new listings.
On the other hand, the share of private promoters declined to a 5-year low of 41.31 percent as of December 31, 2023. This represents a 330 basis point decrease from 44.61 percent on September 30, 2022. Haldea attributes this decline to stake sales by promoters aiming to capitalize on bullish market conditions, relatively lower promoter holding in companies now going public, and the overall institutionalization of the market.
During the quarter, there were 13 companies in which promoters, FIIs, and DIIs all increased their stake, including Westlife Foodworld, Gujarat Narmada Valley Fertilizers & Chemicals, Wonderla Holidays, Ami Organics, Thangamayil Jewellery, Unichem Laboratories, Shankara Building Products, Snowman Logistics, Bajaj Healthcare, Associated Alcohols & Breweries, Macpower CNC Machines, Sukhjit Starch & Chemicals, and Chembond Chemicals.
(With Agency Inputs)
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