BackPromoter holding falls in BSE 100 as FIIs raise stakes
Promoter holding in BSE 100 stocks have fallen between Dec 2008 and Sep 2013 while FIIs have steadily cemented their stake
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A report by India Infoline Research, which analyses investor participation in markets, has thrown up interesting data. The most glaring fact was the fall in promoter holding in the BSE 100 stocks from 56.9% to 48.3% between December 2008 and September 2013. Even retail participation fell, while that of domestic institutional investors inched up marginally from 11.2% to 11.6%.
Promoter holding in the BSE 100 has fallen due to a host of factors. The reasons include the market regulator’s guidelines on free-float requirements, divestment of stake in state-run firms and promoters in some cases pledging shares to tide over challenging economic conditions like a liquidity crunch and surging interest rates.
Meanwhile, foreign institutional investors (FIIs) have steadily cemented their stake in the BSE 100 companies. The report shows a significant rise in their stake between December 2008 and September 2013. This has led to the correlation of Indian market returns to FII inflows, therefore, has been highest compared with other emerging markets like Brazil, Russia, China, Indonesia and South Africa.
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