MUMBAI: The ownership of domestic non-promoter equity market has finally come out of the control of foreign funds in October, following their pull-out of over Rs 1.1 lakh crore in the month. As a result, the share of ownership of domestic institutional investors (DIIs), along with retail investors including high networth individual investors, has reached an all-time high of 26.04% in the September 2024 quarter has risen by a few notches in October.
As per market data aggregator Prime Database, the net FPI outflow in October alone was to the tune of Rs 1,13,859 crore from the secondary market and that of the primary market was Rs 94,017 crore as against their investment of Rs 19,842 crore in primary market.On the other hand, the net inflows from DIIs and retail were Rs 1,07,255 crore in October. With this, DIIs’ share is likely to have already overtaken FIIs’ share by now.
This increasing control comes despite the fact that the share of retail and HNIs has declined slightly to 7.61% and 1.97%, respectively, in September from 7.64% and 1.98% in June 2024. As such, the combined retail and HNI share decreased to 9.58% from 9.61% during the quarter. Individual investors bought a net of Rs 17,810 crore in the secondary market during the quarter.
It can be noted that for years, FPIs were the largest non-promoter shareholders in the domestic market. This is no longer the case as domestic investors are now playing a strong counter balancing role. Meanwhile, the ownership gap between domestic institutional investors and foreign funds have narrowed to an all-time low of 1.09% in the September quarter.
This means that foreign funds still are the single largest owners of domestic equity market at 17.55% while domestic funds/DIIs own 16.46%, which is the highest ever, in terms of their holding in the NSE stocks.
The share of DIIs has marginally rose from 16.25% in the June quarter with a net inflow of Rs 1,03,625 crore during the reporting quarter, according to Prime Database. The widest gap between FII and DII holding was in quarter ending March 2015, when DII share was a staggering 10.31% lower than FII share. In rupee terms, DII holding was 49.82% lower than FII holding as of March 2015, while the FPI to DII ownership ratio was 1.99.