The ownership of Indian-listed companies is changing, with foreign portfolio investors (FPIs) holding less and domestic investors taking a bigger share. According to a report by DAM Capital, FPIs’ ownership in the Nifty 500 companies fell to 18.8% in the June quarter, the lowest in almost 12 years. This is a drop of 30 basis points (bps) compared to the previous quarter, with the total value now at $843 billion.
In contrast, domestic institutional investors (DIIs) reached a record high, holding 16.9% of Nifty 500 companies. Retail investors, including individuals and mutual funds, now control about 53% of the market float, outpacing FPIs.
While FPIs have been reducing their stakes since March 2021, DIIs and retail investors have increased their ownership, especially in large-cap stocks. The sectors gaining the most attention from both FPIs and DIIs include capital goods, consumer services, power, and real estate. However, interest in sectors like FMCG and financials has declined.
Overall, domestic investors have been crucial in balancing the market, especially during global downturns, keeping the Indian market stable despite FPI outflows.
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