Mutual Fund holdings in NSE-listed firms scales to new high, DIIs close gap with FIIs

The share of domestic mutual funds (MFs) in NSE-listed companies rose to 8.92 percent at the end of March 2024

Domestic mutual funds (MFs) raised their share of equity holdings in NSE-listed companies to yet another all-time high, while narrowing the gap with FIIs to an all-time low, showed data from primeinfobase.com.

The share of domestic mutual funds (MFs) in NSE-listed companies rose to 8.92 percent at the end of March 2024, from 8.81 percent in December. This was powered by strong net inflows of Rs 81,539 crore during the quarter, showed the data.

The share of Domestic Institutional Investors (DIIs) as a whole increased to 16.05 percent in the March quarter with net inflows of Rs 1.08 lakh crore, up from 15.96 percent as on December 31.

On the other hand, the share of Foreign Institutional Investors (FIIs) declined to an 11-year low of 17.68 percent at March-end. This has narrowed the FII-DII gap to an all-time low, as the DII holding is now lower than FII holding by 9.23 percent.

The widest gap between FII and DII holding was in the quarter ended March 2015, when DII holding was a staggering 49.82 percent lower than FII holding.

LIC, India’s largest institutional investor, increased its share in 280 companies with more than 1 percent stake to 3.75 percent in March, up from 3.64 percent as of December 2023. The overall share of insurance companies rose from 5.37 percent to 5.4 percent during the quarter. LIC alone has 70 percent share among insurance companies, with holding of Rs 14.29 lakh crore.

According to Pranav Haldea, Managing Director, PRIME Database Group, Indian markets are moving towards self reliance with the share of DIIs set to overtake that of FIIs in the next few quarters.

For years, FIIs have been the largest non-promoter shareholder category in the Indian market with their investment decisions having a huge bearing on the overall direction of the market. "Markets would tank when FIIs would pull out. This is no longer the case. DIIs along with retail investors have now been playing a strong counter balancing role," he said.

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