FII holding lowest last 11 years, Mutual Funds at all-time high

As of March 31, 2024, domestic Mutual Funds (MFs) saw their stake in NSE-listed companies hit a new peak of 8.92%, up from 8.81% at the end of December 2023. This surge was fueled by robust net inflows totaling Rs 81,539 crore during the quarter, according to Primeinfobase, a Prime Database initiative.

Pranav Haldea, Managing Director of PRIME Database Group, noted that Indian markets are shifting towards self-reliance, with Domestic Institutional Investors (DIIs) poised to surpass Foreign Institutional Investors (FIIs) in the coming quarters. “For years, FIIs have heavily influenced the Indian market, but now DIIs and retail investors are playing a stronger role,” he remarked.

Conversely, Foreign Institutional Investors (FIIs) saw their stake drop to an 11-year low of 17.68% by March 31, 2024, down 51 basis points from December 31, 2023. This led to the gap between FII and DII holdings reaching an all-time low, with DIIs now trailing FIIs by just 9.23%.

The largest difference between FII and DII holdings was in the quarter ending March 31, 2015, when DIIs lagged behind FIIs by a significant 49.82%.

Meanwhile, the stake of private promoters fell to a five-year low of 41% by March 31, 2024, dropping by 361 basis points over the last 18 months from 44.61% in September 2022. Haldea attributed this decline to promoters selling stakes to capitalize on bullish markets, lower promoter holding in some IPO companies, and the overall institutionalization of the market.