Retail investors' NSE market-cap share at 22-yr high of 18.75% in Q2FY26

Individual investors’ share in NSE-listed companies stood at 9.6 per cent at the end of the September 2025 (Q2-FY26) quarter, suggests a note by NSE. On market capitalisation (market-cap) basis, the share of individual investors stood at 18.75 per cent in Q2-FY26, the highest level seen in 22 years, NSE said. 

 

"In value terms, represents around Rs 83.6 trillion, implying a five- and 10-year compounded annual growth rate (CAGR) of 29.8 per cent and 21.1 per cent, respectively," the NSE report said.

 

That said, in the last nine quarters, individual investor's share has remained range-bound between 9.5 per cent and 9.8 per cent. The stability (in Q2-FY26), according to the NSE, came on the back of renewed net inflows from individual investors during the quarter, totaling Rs 20,469 crore ($2.4 billion) during the quarter. 

 

"Notably, individual investors’ ownership in listed companies excluding the top 10 per cent companies by market capitalisation rose by 48 basis points (bps) QoQ to over 19-year high of 16.7 per cent, indicating rising exposure to mid- and small-cap companies," the note said.

 

Ownership gap

 

The ownership gap between FPIs and individuals stood at 11 percentage points (pp) in March 2014, NSE said, but has reversed to -1.9pp now. Strong market performance, along with rising participation, the exchange believes, has resulted in a significant accretion to household wealth over the last few years.  

 

 

Meanwhile, FPI ownership in the Nifty 50 and Nifty 500 companies, the NSE report said, declined 43 bps and 46bps quarter-on-quarter (QoQ) in the September 2025 quarter to 13-year lows of 24.1 per cent and 18 per cent, respectively, indicating broad-based selling.

 

That said, barring a marginal uptick in two quarters, FPI ownership in NSE-listed companies had been on a steady decline since March 2023, mirroring volatility in foreign capital flows, the report suggests. 

 

The trend continued in the first half of FY26 (H1-FY26), with FPI's share in NSE-listed companies falling by 63bps during this period to 16.9 per cent—the lowest level in over 15 years. This, NSE said, can be ascribed to FPI net outflows of $8.7 billion during the quarter. 

 

In value terms, FPI holding in NSE-listed companies fell 5.1 per cent QoQ to Rs 75.2 trillion as of September 30, 2025, even as it has grown at a robust annualised pace of 17 per cent in the past two decades—outpacing the 16.1 per cent growth in the overall market capitalisation, the NSE data showed.

 

Domestic mutual funds (DMFs), on the other hand, used the market volatility to scale up their holding across all market segments in the September 2025 quarter, marking the ninth successive quarter of hitting new highs, fuelled by sustained equity inflows. 

 

"DMFs invested Rs 1.64 trillion in Q2-FY26—the 18th straight quarter of positive flows—lifting their ownership to record highs of 13.5 per cent in the Nifty 50, 11.4 per cent in the Nifty 500, and 10.9 per cent in NSE-listed companies," the report said.

 

Promoter ownership

 

After four successive quarters of decline, total promoter ownership in NSE-listed and Nifty 500 companies held broadly steady at 50.1 per cent and 49.3 per cent, respectively, in Q2-FY26. 

 

Within the Nifty 50 universe, however, promoter ownership fell for the sixth straight quarter, down 21 bps QoQ to a 23-year low of 40.0 per cent.

 

Government ownership in NSE-listed companies, on the other hand, slipped 10bps QoQ to 10 per cent in the September 2025 quarter. 

 

"This moderation came even as PSU banks continued to outperform, with the Nifty PSU Bank Index rising 4.5 per cent during the quarter, contrasting with a 3.8 per cent decline in the Nifty Total Market Index," NSE said.