India's largest institutional investor LIC saw its share in listed stocks plummet to a life-time low of 3.64 percent in the quarter ended December 2023 from 3.73 percent in the three months to September 2023. The state-run insurance behemoth has a 1 percent holding each in 277 companies listed on the NSE.
Profit-booking drove the decline in investments, as stated by Pranav Haldea, managing director of PRIME Database Group. Insurance companies, led by LIC with a substantial 68 percent share (Rs13.02 lakh crore) in equity investments, collectively sold a net of Rs 15,622 crore during the quarter.
Domestic mutual funds reached a record high share of 8.81 percent in NSE-listed companies by the December quarter, up from 8.73 percent in the quarter ended in September 2023, driven by net inflows of Rs 58,198 crore, according to a Prime Database report.
Despite net inflows of Rs 54,925 crore, the overall share of Domestic Institutional Investors (DIIs) decreased slightly to 15.96 percent by the December quarter. Foreign Institutional Investors (FIIs) also saw a decline in their share to 18.19 percent by the end of 2023, despite net inflows of Rs 50,588 crore during the quarter.
The combined share of institutional investors (FII and DII together) dropped to 34.15 percent by Q3, down from 34.39 percent in Q2. DIIs are on track to surpass the FIIs in the coming quarters, with the gap between their holdings at an all-time low of 12.23 percent. The FII-to-DII ownership ratio also hit an all-time low of 1.14 percent by Q3, compared to the peak of 1.99 percent in the March 2015 quarter, the Prime Database report added.
The PSU Index surged 23 percent, outpacing the 10 percent rise in Sensex. Over the last 15 years, the government holding in listed PSUs dropped to 22.48 percent, mainly because of divestment, while promoter holding in NSE-listed companies too hit a five-year low of 41.31 percent at the end of the third quarter of this fiscal. In the past year alone, it fell by 330 basis points. Promoters took advantage of the bullish market, and lower holding in companies going public contributed to this decline, Haldea said.
The stakes with retail investors dipped marginally to 7.57 percent, with a net sell-off of Rs 12,163 crore, while that of high net-worth individuals (HNIs) increased marginally to 2.06 percent. Combined retail and HNI share dropped to 9.63 percent, but the overall retail, HNI, and MF share reached an all-time high of 18.44 percent by Q3, Prime Database report added.
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