Domestic investors own more equities than FPIs in 75 large cos: Report

The combined holdings in equities by domestic investors (mutual funds and households) have increased by 720 bps to 25.6% in June 2022, according to the data collated by Morgan Stanley

For the first time since 2010, the number of equities owned by domestic investors has exceeded the holdings of foreign funds in 75 large companies in April-June quarter this year, according to a report.

The combined holdings in equities by domestic investors (mutual funds and households) have increased by 720 basis points (bps) to 25.6 per cent in June 2022, while those owned by Foreign Portfolio Investors' (FPIs) declined by 230 bps to 24.8 per cent, according to the data collated by Wall Street brokerage Morgan Stanley.

The June quarter alone saw a near 90 bps rise in domestic ownership, while FPI ownership fell 84 bps in these 75 companies which are the largest in terms of market capitalisation, the brokerage said.

FPIs' ownership in these companies has declined by 232 bps since December 2014, and by 263 bps year-on-year.

Promoters' holdings also declined 20 bps annually, 5 bps sequentially and a steep 326 bps since 2014.

Financial institutions' holdings in these companies rose 39 bps and 64 bps during the respective periods and declined by 17 bps since 2014. On the other hand, domestic mutual funds saw this rising by 49 bps, 144 bps and 580 bps respectively during the three comparable periods. When it comes to public or retail investors, the same has gone up by 1 bps, 36 bps and 157 bps, respectively.

The promoters of these 75 companies own 44.9 per cent as of June (down from 45.4 per cent in September 2021).

While 24.8 per cent is owned by FPIs, domestic mutual funds hold 9.5 per cent (up from 8.2 per cent in September 2021), public 9 per cent (up from 8.5 per cent), financial institutions 7.2 per cent (up from 6.5 per cent) and NRIs & others 4.7 per cent during this period.

FPIs' ownership, after peaking at 26.9 per cent in September 2021, has been steadily falling. In December 2021 it slipped to 26.4 per cent and by March 2022 it dropped to 25.6 per cent before hitting 24.8 per cent in June 2022, the data said.