During the third quarter of 2023, retail investments in NSE-listed Indian firms reached a record high

This report was created by OXShare

According to Prime Database, the direct ownership of NSE-listed Indian companies by retail investors reached a new high of 7.62% in the third quarter of 2023. This indicates a growing interest in stocks due to India’s strong economy. Retail investors bought stocks worth ₹7,596 crore during this period. Additionally, High Net Worth Individuals (HNIs) also increased their investments, resulting in their ownership reaching 2.05% by September 30, 2023. As a result, the combined ownership of retail and HNI investors (NYSE:HNI) reached a record high of 9.68%.

Nevertheless, the holdings of Domestic Institutional Investors (DII) decreased slightly in the same quarter. The difference between the holdings of Foreign Portfolio Investors (FPI) and DII reached its lowest point ever, suggesting a higher involvement from local institutions like mutual funds and insurance companies. The ratio of DII holdings to FPI holdings reached a new record low of 13.11%.

The increase in the number of people participating in retail activities was caused by lockdowns implemented due to Covid and low interest rates starting from March 2020. As a result, the number of demat accounts rose from 4.09 crore in March 2020 to 13.23 crore by October 2023.

At the same time, the percentage of shares held by promoters reached a four-year low of 41.55% due to selling shares during a period of high stock market performance and a decrease in promoter holdings in newly listed companies because of greater involvement from institutional investors. However, despite this decline, holdings by domestic institutional investors surpassed ₹50 lakh crore.