In the latest quarter ending June 2024, promoter ownership in India’s listed universe has continued its upward trend, marking a significant seven-quarter high. Both the Nifty 500 and NSE-listed companies saw their total promoter ownership increase by 14 basis points quarter-over-quarter (QoQ) to 50.9% and 51.5%, respectively.
This rise is largely attributed to increased stakes by government and foreign promoters, though it was slightly offset by a drop in private Indian promoter ownership, which has now declined for the second and fourth consecutive quarters, respectively. Notably, promoter ownership in Nifty 50 companies fell by a notable 54 basis points QoQ to 42.3%, reversing a six-quarter streak of increases.
Government ownership has been on the rise, buoyed by the performance of public sector undertakings (PSUs). For the NSE-listed universe and Nifty 500 companies, government ownership increased by 27 and 37 basis points QoQ, reaching 11.5% and 12.1%, respectively. In the Nifty 50 index, government ownership also saw a slight increase of 12 basis points QoQ, reaching an 18-quarter high of 7.1%. This uptick is reflective of the strong performance of government-owned entities, with the Nifty PSE index rising 17.1% in the June quarter, outpacing the Nifty 50 and Nifty 500 indices which recorded gains of 7.5% and 11.4%, respectively.
On the flip side, Foreign Portfolio Investor (FPI) ownership has shown a mixed trend. In the Nifty 500 and NSE-listed companies, FPI ownership fell by 24 and 28 basis points QoQ, settling at 18.7% and 17.6%, respectively. This marks the fifth consecutive quarterly drop, aligning with the significant foreign capital outflows of $4.1 billion in April and May 2024. However, in value terms, FPI holdings in NSE-listed companies rose by 11.4% to INR 76 lakh crore by the end of June. Conversely, FPI ownership in Nifty 50 companies increased modestly by 15 basis points QoQ to 24.5%.
FPIs have shown increased interest in the Financials sector, particularly in larger companies, and have become cautiously optimistic about Communication Services due to recent tariff hikes. This optimism contrasts with their growing negative stance on Industrials, Materials, and Consumer Staples, suggesting a cautious outlook on India’s consumption and investment prospects. Additionally, FPIs have adopted a mildly negative view on global sectors such as Information Technology and Healthcare, while remaining neutral on Energy and Consumer Discretionary sectors.
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