DIIs stake in Nifty 500 down to 7-quarter low of 14.3 pc: Report

DIIs have the highest ownership in capital goods 21.9 percent, private banks 20.4, metals 18.3, consumer durables 17.8, and PSBs 17.6. While FPIs raised stake in 64 percent of Nifty 50 companies, DIIs reduced 62 percent of Nifty 50 stocks.

As foreign portfolio investors (FPIs) have increased their holding in the domestic stocks, domestic institutional investors (DIIs) have been net sellers, and their stake in Nifty-500 stocks declined to a seven-quarter low of 14.3 percent in the March 2021 quarter, shows a brokerage analysis.

On an annualized basis, the overall FPI ownership in Nifty-500 stocks rose 160 bps to 22.3 percent in the March quarter from 20.7 percent in March 2020, while that of DIIs declined 50 bps to 14.2 percent from 14.7 percent in March 2020.

On a quarterly basis, the same FPIs saw a 20 bps decline from the December 2020 quarter, and DIIs witnessed a decline by 10 bps, show data from domestic brokerage Motilal Oswal Financial Services.

In the March quarter, while foreign portfolio investors pumped in USD 7.3 billion into domestic equities, domestic institutional funds pulled out heavily with a net outflow of USD 3.2 billion. It indicates that vastly divergent sequential trends are seen between FPI and DII purchases of equities, according to the report.

While FPIs increased weights in two-thirds of the sectors (telecom, metals, consumer durables, realty, and cement), DIIs trimmed weights on these sectors in particular and the overall market in general between the December and March quarters.

While the overall FPI ownership in Nifty-500 grew 160 bps year-on-year to 22.3 percent, which is at the pre-pandemic levels in the fourth quarter of 2020-21, the same saw a marginal 20 bps dip in the quarter-on-quarter.

On the other hand, DII holdings in the Nifty-500 were down 10 bps quarter-on-quarter between March and December, and a larger 50 bps down year-on-year to 14.2 percent, the report said on Wednesday.

Between December 2020 and March 2021, FPIs increased their holding in 286 of the Nifty 500 index, and in 32 of the Nifty 50 index. The same for DIIs were only 217 and 19 stocks, respectively, and FPIs paired their stake in 203 and 18 stocks, respectively, and for DIIs it was 271 and 31, it added.

FPIs increased their ownership in Nifty 500 stocks to 57 percent in March and to 64 percent in Nifty 50 stocks in the December 2020 quarter. On the other hand, DIIs paired their stakes to 56 percent and 62 percent, respectively, during the same period, according to the report.

The FPI-DII ownership ratio in the Nifty 500 remained at 1.6 times in the fourth quarter of 2020-21, which though is unchanged from the previous quarter, but was up from 1.4 times in the March 2020 quarter.

In terms of absolute holdings, of the total FPI holdings of USD 593 billion, private banks are at the top with USD 139 billion in investment value.

On the other hand, of the total DII holdings of USD 378 billion in the Nifty 500, private banks are at the top with USD 59 billion, followed by technology with USD 43 billion and consumers with USD 40 billion.

While FIIs had their highest quarter-on-quarter holding in telecom, metals, and consumer durables, DIIs had it in consumer, healthcare, and state-owned banks.

In the Nifty 500, FIIs have the highest ownership in private banks (47.9 percent), followed by NBFCs (32.9), oil and gas (23.1), insurance (22.2), and real estate (21.5). DIIs have the highest ownership in capital goods (21.9 percent), private banks (20.4), metals (18.3), consumer durables (17.8), and PSBs (17.6).

While FPIs raised a stake in 64 percent of Nifty 50 companies, DIIs reduced 62 percent of Nifty 50 stocks. The only stocks where DIIs increased the holding the most (by over 1 percent) were BPCL, Bajaj Auto, Indusind Bank, and SBI Life Insurance.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)