New Delhi: India Inc. is firming its grip on the stock market with promoter holdings rising 4% in the country’s 500 biggest listed entities, even as all other investor classes are paring exposure to the bourses.
According to a study by the brokerage division of global financial services major Citigroup, promoter holding rose to 58% in the BSE-500 companies in the second quarter this fiscal from 54% in the previous three-month period.
In contrast, FIIs, mutual funds, banks, insurance companies and retail investors cut down their holdings.
“For the latest quarter, promoter ownership has gone up, while ownership of all other categories has come down. This has been mainly due to stronger performance of high promoter stake companies, rather than a major sell down by any category of investors,” Citigroup’s India research head, Ratnesh Kumar, said.
According to Citigroup Research analysis of the ownership patterns, the BSE-500 company saw a fall in FII holdings to 20.2% in July-September from 22% in the previous quarter.
Domestic mutual funds reduced their holdings to 3.7% in the period under review from 4.3%, while insurance firms and other institutions reduced stakes to 5% from 5.5 %.
The companies also saw retail investors cutting down their stake to 9.2% from 10%.
Among the 30 blue-chip firms comprising the benchmark Sensex, FII holdings amount to about 26%, while promoters own about 49.3% stake in the companies. Financial institutions and retail investors together hold the remaining stake.
BSE-500 firms with highest rise in promoter holdings include Bharti Airtel, Adlabs Films, Mphasis, MICO and Adani Enterprises. Adlabs saw a 12% jump in promoter holdings over the three-month period, while Bharti Airtel saw an increase of 5%.
The total capitalisation of the Indian stock market rose by more than Rs10 trillion to Rs52.2 trillion in July-September, while the benchmark Sensex rose by about 2,200 points (over 17%) during the period.
According to Citigroup, the ownership patterns have changed considerably in India over the last five years, with foreign ownership rising from just 12% in 2001 to over 20% at present. However, the domestic fund ownership has come down.
According to sectoral analysis, FIIs continued to remain bullish on industrial, financial, material and telecom sectors. However, their interest in the financial sector declined for the fifth consecutive quarter.
In contrast, insurance companies were not so bullish on industrials and were seen favouring the consumer space. The most under-owned sectors by insurance companies are energy, IT and telecom.