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The latest data shows promoter holdings in NSE-listed and Nifty 500 companies fell for the second consecutive quarter, while FPI ownership dropped to multi-year lows. Meanwhile, domestic mutual funds and retail investors set fresh records, reshaping market dynamics.
Promoter share slides further
Promoter ownership in NSE-listed and Nifty 500 companies declined by 67bps and 92bps QoQ to 50.4% and 49.6%, respectively. The drop was broad-based, with government holdings seeing the sharpest reduction. In the Nifty 50, promoter share fell 96bps QoQ to a near 22-year low of 41.4%.
FPI holdings hit decade-low levels
Foreign Portfolio Investor (FPI) stakes in NSE-listed and Nifty 50 firms plunged to 17.4% and 24.3%—the lowest in 13 and 12 years, respectively.
The decline, driven by heavy selling in large caps, coincided with US$11.9 billion in FPI outflows in Q3 and US$12.1 billion in Q4 so far (as of February 17, 2025).
The value of FPI holdings in NSE-listed firms fell 8.3% QoQ to ₹75.8 lakh crore, marking the first decline in seven quarters.
DMFs dominate with record inflows
Domestic Mutual Funds (DMFs) increased their stake to an all-time high of 12.2% in Nifty 50, 10.5% in Nifty 500, and 10% in NSE-listed firms.
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Steady SIP inflows helped DMFs pump in a record ₹1.5 lakh crore in Q3 and ₹71,000 crore in early Q4, taking total fiscal inflows to ₹4.2 lakh crore. Within DMFs, active funds’ share surged 44bps QoQ to a record 8.1%, while passive funds held steady at 1.8%.
Retail investors outpace FPIs for the first time since 2006
Individual investors’ direct non-promoter ownership in NSE-listed firms climbed 20bps QoQ to a 70-quarter high of 9.8%, with investments of ₹56,000 crore in Q3. Their stake in Nifty 500 rose to 8.8%, while Nifty 50 holdings remained steady at 8.0%.
For the first time since 2006, individual investors—both direct and via mutual funds—now control 18.2% of the market, surpassing FPIs. Household equity wealth has surged by ₹30 lakh crore in two years, reaching ₹79.6 lakh crore (10-year CAGR: 21.3%).
Portfolio shifts
FPIs strengthened their overweight position in Financials but grew more cautious on Consumer Staples, Energy, and Materials, while maintaining a negative stance on Industrials. In contrast, DMFs trimmed their Financials exposure, turned less bearish on Energy and Materials, and became more positive on Consumer Discretionary.
Large-cap exposure declines
Institutional and individual portfolios continue shifting away from large-cap stocks. Nifty 50/top-decile companies now account for just 58.7%/85.9% of institutional holdings and 35%/63.2% of individual holdings—both at or near multi-year lows.
The trend reflects growing exposure to mid- and small-cap stocks, further supported by a decline in market concentration levels post-pandemic.
