FPI Ownership In NSE Listed Companies At 13-Year Low: Know Who Is Selling And Buying Indian Equities

The NSE released the India Ownership Tracker for Q3 FY 2025-26 on February 20. The exchange said in the tracker that Foreign Portfolio Investors have reduced their stake in shares of companies listed on the NSE. However domestic mutual funds and individual investors have continued to increase their stake in NSE listed companies.

Who Is Selling Indian Equities

The exchange said that in the third quarter of FY25, FPIs, the government and promoters of companies have reduced their ownership in shares of NSE-listed companies.

FPI ownership Declines To 13-year lows

As per the ownership tracker, the foreign investors increased their ownership marginally in September 2024 but reduced it in the remaining months of the quarter and brought it to 13-year low levels. Notably, FPI holding in NSE-listed companies dipped by 8.3 per cent in the December quarter to Rs 75.8 lakh crore, marking the first Quarter-on-Quarter drop in the last seven quarters.

FPI ownership in Nifty 50 companies decreased by 30 basis points in the December quarter of FY25 and fell to 17.4 per cent compared to the September quarter of the same fiscal. On a year-on-year basis, FPIs reduced their ownership by 24.3 per cent in the December quarter of FY25 compared to the same quarter of the preceding fiscal.

Even as FPIs sold large-cap stocks listed in the Nifty50, their ownership of Nifty 500 stocks remained steady at 18.8 per cent in the third quarter of FY25. The quarter saw significant FPI outflows to the tune of $11.9 billion.

Promoter Ownership Declines For Second Consecutive Quarter

The total promoter ownership in NSE-listed and Nifty 500 companies fell by 67 bps and 92bps QoQ to 50.4 per cent and 49.6 per cent respectively. The fall marked the second consecutive decline after four quarters of consistent gains. The NSE said that the decline was broad-based across all promoter categories. Promoters reduced their ownership of Nifty 50 stocks to 41.4 per cent in the December quarter, indicating a reduction of 96 bps compared to the September quarter. Notably, this is the lowest level promoter ownership has been at in more than two decades.

Government Share In NSE Listed Companies Falls

The government continued its trend of paring its stake in the NSE-listed companies for the second quarter in Q3 FY25. The government reduced its stake by 53 bps to 10 per cent in NSE listed companies in the quarter ended December 31, 2024. The government also lowered its stake in Nifty 500 companies by 32 bps to 10.9 per cent and in Nifty 50 companies by 26 bps to 7.1 per cent in Q3 FY25. The NSE said that the decline was caused by an underperformance of PSU banks relative to the broader market.

Who Is Buying Indian Equities

The NSE found in its report that Domestic Mutual Funds (DMFs) and individual investors continued to increase their ownership in NSE-listed companies even amid FPI and promoter selloffs.

Domestic Mutual Funds Stake At All-Time High

DMFs’ share rose to fresh all-time highs of 12.2 per cent in Nifty 50 companies, 10.5 per cent in Nifty 500 companies and 10 per cent in NSE listed. The share increased on the back of sustained Systematic Investment Plan (SIP) inflows. DMFs increased their stake by spending Rs 1.5 lakh crore in the December quarter and a further Rs 71,000 crore in the first one-and-a-half months of the fourth quarter of FY25. The total net inflows made by DMFs stood at Rs 4.2 lakh crore in FY25 so far (As of February 14th, 2025).

Individual Investors

Individual investors also increased their stake marginally in the December quarter. Individual investors’ direct non-promoter ownership increased by 20 bps in NSE-listed companies to a 70-quarter high of 9.8 per cent. Individual investors invested Rs 56,000 crore in the December quarter.

The stake of individual investors in Nifty 500 companies rose by 12 bps in the December quarter to 8.8 per cent. Individual investors kept their stake in the Nifty 50 Index steady at 8 per cent. The report found that individuals (directly and indirectly via mutual funds) own 18.2 per cent of the total market cap of Rs 79.6 lakh crore of the market, which is more than the share of FPIs. Notably, this has happened for the first time since 2006.