Retail investors increase stake in 1,018 NSE-listed firms in Q1FY21

The market rally has boosted the confidence of retail investors, with the latter raising stake in 1,018 companies listed on the NSE in the June quarter (Q1FY21). The markets have clocked gains of over 18 per cent in the same period.

Of the total value of outstanding shares on the NSE, shares held by retail investors rose to 6.74 per cent in the June quarter, as against 6.54 per cent in previous quarter, showed data from primeinfobase.com

Further, data pointed to a bigger appetite for mid- and small-cap companies among retail investors. Even though retail investors accounted for a larger number of outstanding shares of NSE-listed companies at 15.29 per cent, the combined value of these holdings was Rs 9.16 trillion.

This was much lower than the value of holdings of foreign portfolio investors (FPIs) at Rs 28.6 trillion and domestic institutional investors (DIIs) at Rs 19.48 trillion, even though both the set of investors accounted for a smaller number of outstanding shares on the NSE.

Promoter ownership in private companies (as a share of combined market cap of NSE firms) rose to an all-time high of 44.43 per cent. Over the last 11 years, the value of private promoter holdings in NSE firms has grown more than four-times, from Rs 14.51 trillion as of June 30, 2009, to Rs 60.37 trillion as of June 30, 2020.

 

Over this same period, private promoters in India consolidated their ownership from 26.45 per cent to 34.86 per cent; a gain of 841 basis points (bps). Foreign promoter holding moved up slightly from 7.16 per cent, to 9.57 per cent in this same period.

Institutional ownership dipped in the June quarter. Mutual funds’ share of holding of NSE companies (in value terms) dipped for first time after 24 quarters of back-to-back rise. It was down to 7.81 per cent in the June quarter.

On similar lines, foreign portfolio investors’ (FPIs) share of holding of NSE companies (in value terms) fell marginally to 21.05 per cent.

Promoter ownership in NSE-listed government-owned companies hit an all-time low of 6.36 per cent.

“Over an 11-year period (since June 2009), the holding has been steadily declining, from 22.71 per cent as of June 30, 2009, due to government’s divestment programme, not enough new listings and also a lacklustre performance of many central public sector enterprises relative to their private peers,” said Pranav Haldea, managing director, Prime Database Group.

LIC’s holding (across 292 companies, where its holding is more than 1 per cent) stood at Rs 5.40 trillion as of June June 30, 2020, increasing 26.93 per cent over the previous quarter. LIC accounts for 77 per cent of equity investments by insurance companies.

Even as ownership of some of the shareholding categories in NSE-listed firms has moderated, the value of holdings in absolute terms rose for a clutch of investor categories.

“This was on account of the recovery in the stock market during the quarter after the steep correction witnessed in March due to the coronavirus pandemic,” Haldea said.

Since March 23 lows, the frontline indices Nifty and Sensex have each seen a rally of about 47 per cent.