FPIs still hold stakes in 1,800 companies amid continued selling since October: NSE

According to a report by the National Stock Exchange (NSE), the FPIs' holdings have seen a significant increase from 1,200 companies four years ago.

It said, "The share of Nifty50/top decile companies in portfolios has fallen to multi-year low levels, reflecting widening exposure to smaller companies. FPIs now hold stakes in over 1,800 stocks, up from 1,200 four years ago."

The report also highlighted a notable shift in investment patterns, with FPIs reducing their focus on large-cap companies and diversifying into smaller firms.

The share of Nifty 50 and other top decile companies in FPI portfolios has dropped to multi-year lows, reflecting this broader exposure. The Herfindahl-Hirschman Index (HHI), which measures portfolio concentration, has also declined after briefly rising during the pandemic.

The October data showed FPI selling was concentrated in the top 100 companies, suggesting a continuation of this trend toward diversification.

Meanwhile, domestic mutual funds have marked a new milestone in India's equity market. Their share in listed equities surged to a record 9.5 per cent in the second quarter of FY25, driven by steady inflows from systematic investment plans (SIPs).

In contrast, the shares of FPIs and individual investors in listed equities remained steady at 17.7 per cent and 9.6 per cent, respectively.

It said, "Individuals, both as promoters and non-promoters (direct and indirect), now own nearly a quarter of the total market cap, reflecting significant wealth creation over the last decade."

The report also highlights significant wealth creation among individual investors over the past decade. Individuals now own nearly 25 per cent of the total market capitalization, which stands at approximately Rs 115 lakh crore, growing at a compound annual rate of 18.5 per cent since 2010.

In October, record-high net selling by FPIs was offset by equivalent net buying from domestic institutional investors, ensuring market stability. Individual investors also emerged as strong buyers during the month, further supporting the market's upward trajectory. (ANI)