Retail investor share declines in NSE:What are they buying, selling

This was on account of profit booking by LIC, mutual funds as also retail and HNI investors with markets reaching all-time highs.

After rising for six quarters in a row, the share of  Domestic Institutional Investors (DIIs), retail and High Net-worth Individual (HNI) investors in companies listed on NSE  has declined in the June quarter on account of profit booking  with markets reaching all-time highs, shows data analysed by Prime Database.

The share of DIIs, retail investors and HNIs rose from 22.40 per cent as on September 30, 2021 to 25.73 per cent as on March 31, 2023, but has since declined to 25.50 per cent as on June 30, 2023 

 Net inflows from DIIs stood at just Rs 3,368 crore during the quarter.

Meanwhile, net inflows from Foreign Institutional Investors (FIIs) of Rs 1,02,617 crore during the quarter resulted in FII share increasing for the fourth quarter in a row to 18.94 per cent as on June 30, 2023 (up by 7 bps from 18.87 per cent as on March 31, 2023). 

While FIIs pumped in Rs 44,065 crore and Rs 16,818 crore in Financial Services & Auto sector respectively, they pulled out Rs 9,376 crore from Information Technology sector during the quarter.

"The gap between FII and DII holding widened in this quarter with DII holding now being 15.19 per cent lower than FII holding (On March 31, 2023, DII holding was 13.29 per cent lower than FII holding). The widest gap between FII and DII holding was in quarter ending March 31, 2015, when DII holding was 49.82 per cent lower than FII holding. The FII to DII ownership ratio also increased to 1.18 as on June 30, 2023 up from 1.15 as on March 31, 2023," said Pranav Haldea, Managing Director, PRIME Database Group.

The total share of institutional investors viz. FII and DII combined declined to 35.01 per cent in quarter ending June 30, 2023, down from 35.24 in quarter ending March 31, 2023.

The share of domestic Mutual Funds (MFs) declined to 8.64 per cent as on June 30, 2023, after increasing for 7 consecutive quarters, from 7.24 per cent as on June 30, 2021 to 8.74 per cent as on March 31, 2023. 

Net inflows by domestic MFs stood at just Rs 2,979 crore during the quarter. 

MFs increased their exposure to Financial Services and Industrials sectors while trimming down their exposure to Diversified and FMCG.

Share of Insurance companies as a whole also declined to 5.67 per cent as on June 30, 2023, down from 5.87 per cent as on March 31, 2023.

 LIC continues to command a lion’s share of investments in equities by insurance companies (at least 68 per cent share or Rs 11.16 lakh crore). LIC’s share (across 273 companies where its holding is more than 1 per cent), also decreased to 3.85 per cent as on June 30, 2023 from 3.99 per cent as on March 31, 2023. 

Insurance companies increased their exposure to Energy and FMCG sectors while trimming down their exposure to Diversified and Consumer Discretionary.

Share of retail investors (individuals with up to INR 2 lakh shareholding in a company) remained same at 7.49 per cent as on June 30, 2023 from one quarter back while the share of High Net Worth Individuals (HNIs) (individuals with more than INR 2 lakh shareholding in a company) increased to 1.94 per cent as on June 30, 2023 from 1.88 percent on March 31, 2023, despite retail investors selling a net of Rs 25,497 crore during the quarter.

The combined retail and HNI share stood at 9.43 per cent as on June 30, 2023, up from 9.37 per cent as on March 31, 2023.

Companies which saw the highest increase in retail holding in value terms (top 10) in last 1 quarter were as  follows:

There were 12 companies in which the trinity of promoters, FIIs and DIIs all increased their stake during the quarter these being (in descending order by market capitalisation) Relaxo Footwears, Godawari Power & Ispat, Mrs.Bectors Food Specialities, HBL Power Systems, Welspun Enterprises, Jai Balaji Industries, Shakti Pumps, Mangalam Cement, Snowman Logistics, CSL Finance, Salzer Electronics and Dynemic Products.

On an overall basis, retail holding went up in 908 companies listed on NSE in the last 1 quarter. The average stock  price of these companies in the same period increased by 21.44 per cent. On the other hand, retail holding went down  in 885 companies. The average stock price of these companies increased by 28.22 per cent. 

Companies which saw the highest decrease in retail holding in value terms (top 10) in last 1 quarter were as  follows:

Companies which saw the highest buying by retail investors (top 10) in previous quarter were as follows:

Source: primeinfobase.com
*Net Buy has been calculated by multiplying the difference in March and June shareholding by the average closing price during the quarter.

Companies which saw the highest selling by retail investors (top 10) in previous quarter were as follows:

Change in Number of Retail Shareholder

Companies with the highest increase in number of retail shareholders (top 10) in last 1 quarter were as follows:

Companies with the highest decrease in number of retail shareholders (top 10) in last 1 quarter were as follows:

What is also significant to note, is the continuing overwhelming presence of retail investors in mid & small  cap companies, which institutional investors typically stay away from. 

As on June 30, 2023, while the value of  the 5.81 per cent (by number of shares or share by volume (Average of ‘FII Holding as a % of Total Share Capital’  across all NSE listed companies)) held by FIIs in all companies listed on NSE was Rs 54.85 lakh crore and the value  of the 5.95 per cent (by number of shares or share by volume) held by DIIs was Rs  46.52 lakh crore, the value of the  huge 16.28 per cent (by number of shares or share by volume) held by retail was only Rs 21.69 lakh crore.

"The  picture is very different if one looks only at Nifty-50 companies; the retail share in these companies was a meagre 6.89 

per cent (by number of shares or share by volume), declining marginally to 6.47 per cent in case of top 100 companies 

listed on NSE," said Haldia.