HNI holdings in Nifty companies soar in Q1

Holdings of high net-worth individuals (HNIs) in 479 companies in the Nifty 500 index climbed to at least a 10-quarter high in the April-June period.

Market data showed the ownership of HNIs in the companies under review for NSE 500 index was 3.17% by percentage shares in the June quarter compared to 3.09% in the previous three months, while it was 2.98% in the same period last year. By value, HNI holdings in these companies was 1.69% or ₹2.20 trillion in the June quarter from 1.68% or ₹1.76 trillion in the previous quarter.

For 1,594 firms among all listed companies on the NSE, HNIs’ holdings increased to 1.84% by June-end from 1.78% in March. In absolute value terms, HNI holding was ₹2.50 trillion in April-June, an increase of 28.12% over the previous quarter. HNI ownership by value percentage for all listed firms went up to 3.73% in the quarter ending June from 3.61% quarter-on-quarter.

“Equity markets sharply declined because of covid-related sell offs, which resulted in valuations turning attractive in late March. As valuations became attractive post steep corrections, investors with strong risk appetite favoured buying stocks in following months. Many investors made re-allocations in their portfolio by re-balancing equities,” said an analyst, seeking anonymity.

In the three months ended March, benchmark indices had crashed around 29% with a more than 20% slump in a single day in the month while the markets gained nearly 19% in the April-June period.

On an overall basis, HNI holdings went up in 669 companies listed on NSE in the last quarter. The average stock price of these companies in the same period increased by 61.79%, while HNI holdings fell in 691 companies, according to primeinfobase data, part of Prime Database group.

Companies that saw the highest increase in HNI holdings in percentage terms in the last quarter were Euro Ceramics, Reliance Naval Engineering Ltd, Sundaram Multi Pap Ltd. HNI holdings in these companies stand at 29-61% in the June quarter. Even beaten down stocks such as Reliance Capital and Videocon Industries Ltd saw an increase in HNI holdings of 23.91% and 20.28%, respectively, by end-June.

“After the rally from March 20 lows, the Nifty at 21 times price to earnings (PE) is now trading at a premium to its long-period average. However, it is not looking as attractive as it did in March,” said analysts at Motilal Oswal Financial Services Ltd.