Private promoters' shareholding at eight-year low after large share sales in June quarter

"Relatively lower promoter holding in some of the recent IPO companies and overall institutionalization of market are some of the other reasons behind this fall," said Primedatabase.

A net share sale worth Rs 54,732 crore by Indian promoters during the June quarter resulted in the private promoter shareholding in NSE-listed companies to fall to an eight-year low of 40.58 percent as compared to 40.81 percent as of March 2025, according to data shared by primeinfobase.com.

This is the lowest level since September 2017, and has happened at a time when the shareholding of Domestic Institutional Investors (DIIs) has surged to an all-time high.

Read More: For the first time, DIIs hold larger share than FIIs in Indian markets

As of June quarter, the Indian promoters now make up for 32.56 percent of shareholding compared to 36.86 percent in the March quarter, while foreign promoters' stake fell to 8.02 percent from 8.28 percent a quarter ago. In the June quarter, DIIs invested Rs 1.68 lakh crore to outpace FIIs, whose shareholding in listed Indian companies has now fallen to a 13-year low of 17 percent, the note said.

DIIs had overtaken FIIs in terms of shareholding in Indian equities during the March quarter, with domestic mutual funds playing a key role in the fund flow, supported by domestic insurance companies.

Read More: Promoter holding declines in Nifty 500 companies

Pranav Haldea, Managing Director, Prime Database said while promoter buying is a positive sign, promoter selling can be due to a variety of reasons. It is possible that the selling could be because of promoters taking money off the table, or strategic reasons such as debt reduction, legacy planning, investment in other ventures, philanthropy or even to meet Minimum Public Shareholding (MPS) requirement, or for personal expenses.

"Relatively lower promoter holding in some of the recent IPO companies and overall institutionalization of market are some of the other reasons behind this fall," said Primedatabase.

Investors need not panic when promoters sell, said Haldea, adding that instead they should evaluate each case on its merit. As long as promoters continue to hold sizeable stake even after the sale, and the transaction does not happen at a huge discount to the current market price, there is no reason to worry.

Read More: Promoters rush for the exit as stocks soar but discounts raise alarm

Going forward, Haldea said markets could see this trend continue towards even more 'atmanirbharta' (self reliance), with the day 'not too far' when mutual funds' share alone may overtake that of FIIs.

DIIs along with retail and High Net Worth Individuals (HNIs) are now a strong force in Indian equity markets, with a combined shareholding of 27.4 percent as of June 2025, which is a record high.

The Prime Database note cited 21 companies where promoters, FIIs and DIIs, all increased stake during the June quarter. Some of these names are: Jindal Steel & Power, Bandhan Bank, Aavas Financiers, Valor Estate, Maharashtra Seamless, Thangamayil Jewellery, GNA Axles, Royal Orchid Hotels, Dhampur Sugar Mills, Zee Media, Nahar Poly Films, among others.