Domestic investors turn Big Bull of Dalal Street; here’s how

Holding of domestic institutional investors (DIIs) along with retail and high net-worth individual investors reached an all-time high of 24.03 per cent as on September 30, 2022, according to primeinfobase.com. The figure stood at 23.54 per cent in the previous quarter ended June 30, 2022. DII, which includes domestic mutual funds, insurance companies, banks, financial institutions and pension funds, poured Rs 17,597 crore into the domestic equity market from July 1 to September 30.  

On the other hand, despite infusing Rs 48,570 crore into domestic equities in Q2FY23, share of foreign portfolio investors (FPIs) declined 17 basis points to a fresh 10-year low of 19.03 per cent in September quarter from 19.20 per cent in June quarter. The BSE benchmark Sensex climbed over 8 per cent in the September quarter following robust inflows from both DIIs and FIIs.

Pranav Haldea, Managing Director at PRIME Database Group said, “This further showcases the rise of domestic investors and the huge counterbalancing role they have played to foreign investors.”

To put this in perspective, as on March 31, 2015, FPI holding stood at 23.30 per cent while the combined share of DII, retail and HNI in the domestic equities market was just 18.47 per cent.

“The difference between FPIs and DIIs holding decreased to its lowest level in this quarter, DIIs holding now being just 22.30 per cent lower than FPIs holding (On June 30, 2022, DII holding was 26.74 per cent lower than FPI holding),” Haldea said, adding the widest gap between FPIs and DII holding was in the quarter ending March 31, 2015, when DII holding was 55.45 per cent lower than FPI holding.

The FPI to DII ownership ratio also declined to an all-time low of 1.29 on September 30 down from 1.37 as on June 30. Over a 13-year period (since June 2009), FPI share has increased from 16.02 per cent to 19.03 per cent while DII share has increased from 11.38 per cent to 14.79 per cent. The total institutional investor shareholding which includes FPI and DII reached 33.82 per cent in the quarter ending September 30, up from 33.26 in the quarter ending June 30.

Share of domestic mutual funds in companies listed on the NSE increased for the fifth quarter and reached an all-time high of 7.97 per cent as of September 30, up from 7.95 per cent as of June 30.

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