Retail ownership in India Inc. cools in Q4 amid market slowdown, shows data

Individual investors' direct non-promoter ownership declined by 30 basis points (bps) in the March quarter, NSE data shows

As markets saw bouts of volatility in the fourth quarter (Q4FY25), retail investors took a step back with their share in their direct ownership of India Inc. dipping to a seven-quarter low, in line with the moderation in net investments. 

 

Individual investors’ direct non-promoter ownership declined by 30 basis points (bps) in the March quarter to 9.5 per cent, on a sequential basis, according to a NSE report.  

 

While retail investors' direct holdings in the Nifty50 universe remained steady at 7.9 per cent, their share in the broader Nifty500 index fell by 14 bps sequentially to a nine-quarter low of 8.6 per cent. This reflects the impact of the relative underperformance of mid- and small-cap companies during the quarter, NSE said.

 

  In the January to March period, the benchmark Nifty50 fell 0.53 per cent, while the Nifty midcap 100 and Nifty smallcap 100 declined 9.6 per cent and 14 per cent. The key gauges took a hit from US President Donald Trump’s tariff see-saw and foreign outflows.  

 

The net outflows of ₹15,300 in March 2025 were the highest ever monthly outflows by retail investors from the NSE’s cash markets, the report added.

 

However, individual investors as direct and indirect (via mutual funds) investors today own a record-high of 18.2 per cent of the total market cap, outpacing the share of foreign portfolio investors (FPIs) in FY25 for the first time since 2006. The level remained largely unchanged from the previous quarter, according to the report. 

 

Strong performance of Indian equities, coupled with rising participation, has resulted in a significant increase in household wealth over the last few years, it said. "Our estimates suggest that the household wealth in Indian equities increased by over ₹46 lakh crore in the last five fiscal years." 

SIP drives MF's share to new highs 

Driven by robust Systematic Investment Plan (SIP) inflows, up 45.2 per cent year-on-year (Y-o-Y) in financial year 2025, domestic mutual funds (DMFs) reached record-high ownership levels in Indian equities, the NSE report said. 

 

Their share climbed to 12.6 per cent in Nifty 50, 10.7 per cent in Nifty 500, and 10.4 per cent in all NSE-listed firms, surpassing individual investors for the first time. 

 

DMFs invested ₹1.9 lakh crore in the March quarter, totalling ₹6.1 lakh crore for the year—an all-time high. Passive fund share rose to 2.0 per cent. Portfolio shifts included reducing exposure to financials and energy, while favouring consumer discretionary stocks.

 

Meanwhile, after a year-long decline, foreign portfolio investor ownership in NSE-listed companies saw a slight rebound in March 2025. Rising 12 basis points quarter-on-quarter to 17.5 per cent, the uptick was driven by a rally in private banks, where FPIs hold significant exposure.