Shareholding moves in Q4: Retail investors jump ship in choppy waters
Summary
In the first part of our series on shareholding data, we look at divergent stakes by different categories of investors when headwinds hit hard in the March quarter.
The March quarter was a rollercoaster for Indian equities: a historic February low gave way to a tentative March rebound. Against a backdrop of global uncertainty, however, investor actions showed a divided house.
Retail investors slashed their holdings as on 31 March, marking the steepest pullback among all investor categories, a Mint analysis of 3,315 BSE-listed firms reveals. The shift reflects a growing caution after outsized gains in 2024, with profit-booking and repositioning driven by rising global and domestic headwinds.
During the September and December quarters, retail investors—individuals owning shares worth up to ₹2 lakh—pruned their holdings in 49.6% of the firms in which they held stakes (1,645 companies) while increasing their holdings in nearly 43%. This marked the most pronounced shift among investor classes.
In contrast, foreign portfolio investors (FPIs) displayed a balanced approach, raising and lowering their stakes by 38.6%. Mutual funds also showed remarkable steadiness, increasing their stakes in 446 companies while keeping their stakes in 76.1% of the companies unchanged.
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“Retail investors sharply cut exposure in Q4 FY25, reacting to heightened market volatility, macro concerns, and a broad sell-off," said Harshal Dasani, business head at INVasset PMS, a portfolio management service provider. “Retail investors, more sensitive to short-term swings, reacted to falling portfolios, a slowdown in consumption, liquidity crunch, and persistent FPI selling."
Overall trend
Consequently, the overall ownership pattern reflected a combination of anxiety, leading to reduced exposure and abstinence as many investors chose to remain on the sidelines.
Retail investors, who had steadily increased their holdings from 13.1% in Q4 FY24 to 14.3% by Q3 FY25, halted their buying spree in the March quarter, with ownership plateauing for the first time in the year.
In contrast, FPIs nudged up their stakes from 12.1% to 12.3%, signaling a cautious comeback. Domestic mutual funds held steady at 6.1%, reflecting their disciplined and long-term investment approach.
Sectoral churn
The retreat by retail investors was most pronounced in segments like cement, chemicals, and apparel.
Individual investors sequentially pruned stakes in 23 out of 33 cement companies. In the readymade garment or apparel space, around 67% of the firms saw a drop in retail ownership on a quarter-on-quarter basis, while over 60% of the firms in the chemical sector saw individuals paring their stakes during the March quarter.
Information technology and IT-enabled services firms, facing a looming US slowdown, saw significant retail (46%) and FPI (44%) stake reductions, while mutual funds showed resilience with only 10% trimming exposure and 73.4% holding steady. “Muted results and weak outlooks weighed on tech," said Dasani.
Also read | Big Four of Indian IT lose market share; HCL Tech's outlook offers little relief
In the consumption sector, retail investors reduced holdings in 48% of the 497 companies analysed. FPIs exited 41% of the firms, while mutual funds trimmed stakes in just 12%, keeping their positions unchanged in 69%. “Retail sentiment soured due to weak demand trends," Dasani added.
The banking and financial space saw retail stake cuts in 47% of the 468 companies tracked. FPI reductions were limited to 29% of the firms, while mutual funds pared their holdings in only 9.2%, leaving 80.3% of the positions unchanged. “Liquidity tightening concerns drove retail outflows," Dasani noted.
This is the first part of a series of data stories on the latest shareholding pattern. Read the full series here.
