New Delhi: While Indian stock market is rejoicing in its newly achieved trillion-dollar status, the promoters and foreign investors are taking away nearly all the cake and the small domestic investors have been left with just the crumbs.
The promoters of all listed companies on the Bombay Stock Exchange together hold shares worth as much as $568 billion (Rs23,00,771 crore), while the combined holding of other institutions and corporates from India and abroad is worth over $350 billion.
The total investors’ wealth currently stands at $1,009 billion (Rs40,88,944 crore) in terms of cumulative market value of all the companies listed at the BSE.
An analysis of shareholdings of various classes of investors on the bourses and their value shows that promoters, foreign investors and other institutional as well as corporate investors together own close to $900 billion.
Others, including retail Indian investors, NRIs and high net worth people, hold just about 10% or $100 billion at the bourses.
The share of small investors — those who can invest up to a nominal amount of Rs1 lakh in a company — is even smaller at about $50 billion.
Justifying the influence of FIIs, other foreign investors and global markets, the foreigners are the second biggest player on the domestic bourses after promoters.
According to the latest shareholding data as of 31 March, and market capitalisation figures on Friday last week, the foreign holding on the Indian bourses is worth about $215 billion (Rs8,70,000 crore).
The non-promoter corporates hold shares worth about $48 billion, while institutions such as banks and mutual funds, have about $91 billion.
BSE’s market cap crossed the trillion-dollar mark for the first time on Monday last week, representing a sharp gain of about 60% in one year and a gain of close to $100 billion from about $902 billion a month ago.
However, the sharp rise in dollar terms has also been driven by a significant appreciation in the rupee value. In local currency, the market cap has gained just 42% in the same period from about Rs28,40,000 crore a year ago.
Among the top blue chips, market cap of Reliance Industries, the country’s most valued firm, has nearly doubled to over $60 billion (about Rs2,44,000 crore) in one year.
However, promoters hold 51% shares, worth $30.7 billion (Rs1,24,346 crore) in RIL.
The average promoter holding in Indian companies is about 46.3%, while foreign holding in BSE-listed companies is just 5%. However, foreign holdings are generally higher in high-value companies, which is responsible for the high value of their actual worth.
In comparison, small investors hold mostly nominal stakes in big companies, while their holdings are relatively larger in lesser-valued companies.
Small investors hold an average of 9.5% stake in the 30 Sensex companies and nearly 11.5% of the BSE 500 companies.
Their average holding across the market is close to 22%, but it does not translate into much of wealth creation as their larger shareholdings are mostly in the companies with nominal market values.
Interestingly, about $10 billion in the small investors’ kitty come from the five most valued companies — Reliance Industries, ONGC, Bharti Airtel, NTPC and TCS, while the 30 biggest blue chip firms on the benchmark Sensex index is about $35 billion.