FPI ownership in NSE-listed firms drops to 13-year-old low, domestic mutual funds strengthen the holding of all time high

The ownership of foreign portfolios (FPIs) in Indian stocks continued its downward trend in June quarter, with their share in NSE-listed companies falling 16 basis points (BPS) to 17.3%-the lowest level in nearly 13.5 years, according to the August issue of the NSE Market Pulse report. The decline reflects persistent volatility in foreign capital flow since March 2023, with some marginal upticks. FPIs prefer big cap exposure despite the overall decline, FPIs have a clear preference for names in the big captain. Their ownership in Nifty 50 businesses increased by a quarter-to-quarter of 24.5%by a quarter-to-quarter (QOQ). Holdings in the Nifty 500 remained largely stable at 18.5%, suggesting that selective inflow into top-level stocks is amid global macroeconomic and market uncertainties. Sector has strengthened FPIs their overweight stance on finance, incrementally positively turned communications and maintained caution for consumer and commodity-linked sectors such as consumer staples, energy and materials. According to the report, their views on industries remained negative, while they remained neutral about consumer discresionary, IT, healthcare, aid programs and real estate. Promotal shareholding still falls the promoter shareholding has expanded its downward track for the fourth consecutive quarter. In the NSE-listed and Nifty 500 universe, promoter ownership by 13 BPS and 27 BPS, respectively, dropped to 50.0% and 49.3%, with a low of the multi-quarters. In the Nifty 50, the decline sharper-32 BPS was down to a nearly 23-year-old low of 40.2%main due to reduced interests of private Indian and government promoters. The government’s interest shows a mixed trend after rising in the FY23–24 following the Lic Listing and Psu rally, the government’s ownership showed diverse trends in Q1FY26. In NSE-listed and Nifty 500 businesses, the government’s share rose modestly to 10.1% and 10.9%, supported by a 15% period in the PSU Bank index. In the Nifty 50, however, the government’s shareholding dropped 14 BPS to a six -quarter low of 6.7%, which was the third straight decline. Domestic mutual funds have hit record highs, unlike FPIs, domestic mutual funds (DMFs) have still gained land. The net equity inflow of £ 1.2 Lakh Crore-the 17th consecutive quarter of positive flow-has domestic funds’ ownership to fresh highlights of 13% in the Niftig 50, 11% in the Nift-500 and 10.6% in the NSE-listed companies. Retail investors remained a key pillar, with the average monthly SIP inflow climbing in the first quarter FY26 to £ 26,863 crore, with 2.9% QOQ and almost 29% year. Active funds driven the profits, with their share expanding to 8.6%, while passive funds remained steady at 1.9%. DMFs also re-aligned portfolios closer to benchmarks-which put over overweight positions in large caps, which change positively on materials and smaller consumers’ discretionary names, while reducing energy exposure amid poor rough prices and regulatory uncertainty. Disclaimer: The views and recommendations above are those of individual analysts or brokerage companies, and not of currency. We advise investors to check with certified experts before making investment decisions.