The sale of LIC shares – the largest issue although it was sharply reduced – pushed the government’s stake in listed companies to a high of 7.15% in the June quarter, from 5.48 % in the March quarter.
But in terms of value, the government’s stake in NSE companies jumped by 20.24% to Rs 16.99 lakh crore – mainly due to the LIC issue, which is now valued as the tenth in terms of market capitalization of Rs 4.29 lakh crore – in the June Quarter. It was Rs 14.13 lakh crore in March 2022, according to an analysis by Prime Database.
This is far below the value of Reliance Industries, which has a market capitalization of Rs 17.63 lakh crore.
Government ownership (as sponsor) in NSE-listed companies increased to 7.15% as of June 30, 2022, from 5.48% in March 2022.
According to Pranav Haldea, Managing Director of Prime Database Group, this was mainly due to the IPO of Rs 20,557 crore LIC in May (which is only about a third of what was originally expected, selling only 3 .5 percent).
Over the past 13 years (since June 2009), the state’s share in listed companies has steadily decreased from 22.48% in June 2009 to 7.15% in June 2022, mainly due to divestments, lack of many new listings as well as poor performance of many CPUs compared to their private peers.
On the other hand, the share of private promoters fell to 44.33% in June against 45.12% in March. Surprisingly, since June 2009, the share of private developers has steadily increased, rising from 33.60%.
In terms of value, private developer holdings increased more than sevenfold to Rs 105.32 lakh crore in June 2022 from just Rs 14.49 lakh crore in June 2009, driven mainly by new listings.
Of this amount, the share of domestic private developers has increased from 26.44% to 35.67% over the past 13 years, while the share of foreign developers has fallen from 7.16% to only 8.66%.
According to the analysis, the top 10 companies by market capitalization accounted for a whopping 90.68% of all REIT holdings, up from 90.51% in March 2022, 85.61% of all DII holdings (down from 85 .19%) and 82.93% 100 of all FM holdings (vs. 82.65%), showing high levels of concentration in institutional investor holdings, Haldea says.
Even though the share of retail and HNI investors also declined, the collective share of retail, HNI and MF investors reached an all-time high of 17.42%, down from 17.38%.
The share of HNI also declined to 2.08% from 2.21%, as did the combined share of retail and HNI, which fell to 9.47% from 9.63%.
But in terms of value, the share of retail investors fell to 7.40% or Rs 17.58 lakh crore from 7.42% or Rs 19.15 lakh crore.
The share of domestic institutional investors (MFs, insurers, banks, financial institutions, pension funds, etc., as well as retail investors and high net worth individuals) reached a record high of 23.53% in June 2022, compared to 23.34 % in June 2022. March 2022, thanks to net inflows of DII amounting to Rs 1,28,277 crore during the quarter.
It also sent the share of foreign portfolio investors (REITs) plummeting to a ten-year low of 19.2% (or Rs 45.62 lakh crore) as they were on a selling spree during the quarter with a record high. of Rs 1,07,340 crore.
Their stake is down 96 basis points from 20.16% in March 2022. In March 2015, their share was 23.30% while the combined share of DII, retail and HNI did not was only 18.47%.
However, REITs remain the largest non-promoter shareholders in the domestic market and their investment decisions have a significant impact on stock prices and the general direction of the market.
The value of REIT holdings in NSE businesses stood at Rs 45.62 lakh crore in June 2022, down 12.26% from Rs 51.99 lakh crore in March 2022. REITs withdrew 69,476 crore Rs of shares in the financial services and information technology sector during the quarter and invested Rs 5,087 crore in services and healthcare.
According to Haldea, this further illustrates the rise of domestic investors and the huge countervailing role they have played for foreign investors.
The gap between REIT and DII ownership narrowed to its lowest level this quarter, with DII ownership now only 26.77% lower than REIT ownership. In March 2022, DII ownership was 31.99% lower than REIT ownership. The largest discrepancy between REIT and DII ownership occurred in March 2015, when DII ownership was 55.45% lower than REIT ownership.
The REIT/DII ownership ratio also declined to an all-time low of 1.37 in June 2022 from 1.47 in March 2022. Since June 2009, the REIT share has fallen from 16.02% to 19.20 % while DII’s share rose from 11.38 percent. cent to 14.06 percent.
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