In June 2024, the ownership landscape of NSE-listed companies witnessed notable shifts. Promoter share continued its upward trend, reaching a seven-quarter high of 51.5%. This marked the fifth consecutive quarter of growth, resulting in an 80-basis point (bps) increase in the first half of 2024. The rise was primarily driven by increased stakes from the government and foreign promoters, offset by a decline in private Indian promoter ownership for the second consecutive quarter.
Foreign promoters saw their share rise by 28bps to 8.3%, while private Indian promoters experienced a 33bps drop, bringing their stake to an 18-quarter low of 32.4%. Interestingly, individual promoters, including Hindu Undivided Families (HUFs), increased their holdings by 20bps to 6.5%, with individuals now accounting for 20% of private Indian promoter holdings.
Government ownership also surged, reaching a 30-quarter high. After years of decline due to disinvestment efforts, the government's stake in NSE-listed companies rose significantly. In FY23, government ownership increased by 2.4 percentage points (pp), largely due to the listing of LIC (NS:LIFI). This trend continued in FY24, with government ownership rising by another 2.8pp, driven by the strong performance of Public Sector Undertakings (PSUs).
In the June quarter alone, government ownership inched up by 27bps to 11.5%, with PSUs outperforming the broader market. The NIFTY PSE index, which tracks government-owned companies, posted a robust 17.1% gain in the June quarter, compared to the 7.5% and 11.4% returns recorded by the Nifty50 and Nifty500 indices, respectively.
On the flip side, Foreign Portfolio Investors (FPIs) faced headwinds, with their ownership dropping to a 12-year low of 17.6%. This marked the fifth consecutive quarter of decline, amounting to a 65bps dip in the first half of 2024. Despite the overall decline, FPIs' portfolios grew by 11.4% quarter-on-quarter, although this was lower than the 13.4% rise in total market capitalization during the same period.
The decline in FPI share was partly attributed to significant foreign capital outflows, with net FPI outflows reaching $911 million in the June quarter. Interestingly, FPIs slightly increased their stake in financials, with a 14bps rise to 24.5%. However, excluding financials, FPI ownership in the NSE-listed universe fell by 35bps to a 47-quarter low of 15.6%.
June 2024 highlighted a shifting ownership dynamic in NSE-listed companies, with government and foreign promoters gaining ground, while FPIs and private Indian promoters faced challenges in maintaining their stakes.
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