Promoter ownership in NSE-listed companies at seven-quarter high of 51.5% in Q1; FPI holding dips to 12-year low

Promoter ownership in NSE-listed companies increased for the fifth consecutive quarter during Q1 FY25, reaching a seven-quarter high of 51.5%. This represents a 14 basis points (bps) rise quarter-on-quarter (QoQ) and an 80 bps increase in the first half of 2024.

The growth was largely attributed to higher government and foreign promoter holdings, although this was partially offset by a continued decline in private Indian promoter ownership for the second consecutive quarter, as detailed in NSE's India Ownership Tracker report.

Foreign promoters increased their ownership in NSE-listed companies by 28 bps QoQ, bringing their stake to 8.3%. In contrast, private Indian promoters saw their ownership decline by 33 bps QoQ, reaching an 18-quarter low of 32.4% in the June quarter. This decrease was mainly due to a reduction in non-individual private promoter holdings, despite a 20 bps QoQ increase in the share held by individual promoters (including Hindu Undivided Families) to 6.5%.

Notably, individual promoters now account for 20% of the total private Indian promoter holdings in NSE-listed companies, the NSE data showed.

Government ownership at 30-quarter high

Government ownership (both promoter and non-promoter) in NSE-listed companies increased by 2.4 percentage points (pp) in FY23, primarily due to Life Insurance Corporation of India's (LIC) listing, and by another 2.8pp in FY24, driven by the relative outperformance of PSUs.

This upward trend has continued in FY25, with government ownership increasing by 27 bps QoQ (+127 bps in H1 2024) to a 30-quarter high of 11.5%. The continued outperformance of public sector companies (PSUs), as evidenced by the Nifty PSE index’s 17.1% gain in the June quarter, compared to the 7.5% and 11.4% returns of the Nifty50 and Nifty500 indices, contributed to this rise.

FPI ownership at 12-year lows

FPI shareholding declined for the fifth quarter in a row by 28 bps QoQ to a 12-year low of 17.6% as of June 30, 2024, translating into a 65 bps dip in the first half of 2024. However, FPIs’ portfolio expanded by 11.4% QoQ, growing for the fifth quarter in a row, albeit lower than the 13.4% rise in the total market cap in the June quarter.

The decline in FPI share is partly attributed to steep foreign capital outflows in the first two months of the quarter, with net FPI outflows in the quarter at $911 million, as per NSE report.

After seeing a dip in the previous four quarters, FPI share in Financials actually inched up by a modest 14 bps QoQ to 24.5%. Excluding Financials, FPI share in the NSE listed universe fell by an even higher 35 bps QoQ to a 47-quarter low of 15.6%.

Mutual Funds shareholding at record high

Domestic mutual funds’ share in the listed universe rose by 25 bps QoQ to a fresh all-time high of 9.2% in the June quarter. The domestic fund houses injected a net amount of ₹1.3 lakh crore into Indian equities in Q1FY25, taking the total net inflows to ₹8.1 lakh crore since April 2022. A part of this is attributed to rising indirect participation of individuals via the Systematic Investment Plan (SIP) route.

SIP inflows have risen steadily in the last few years, with an average monthly run rate rising by 9.1% QoQ to ₹20,846 crore in the June quarter. Out of the total domestic mutual funds’ share of 9.2%, passive funds’ share remained broadly steady at 1.7%, with the balance 7.5% was held by active funds, up 21 bps QoQ.

Meanwhile, the share of Banks, Financial Institutions and Insurance companies in the NSE-listed space dropped for the fifth quarter in a row to a two-year low of 5.4% in the June quarter, even as it remains nearly a percentage point higher than the post-pandemic lows.

Individual investors’ share of the total NSE listed companies inched up by 10 bps QoQ to 9.6% at the end of the June quarter, as they injected a net amount of ₹39,278 crore in the secondary markets during the quarter on top of ₹52,568 crore in the previous quarter.

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