Record rally pulls in new patrons: Retail holding at all-time excessive

Indian retail buyers are set to be large beneficiaries of the current rally within the inventory markets as they’ve elevated their participation and holding of NSE listed firms during the last 18-months. The retail holding of NSE listed firms hit a report excessive of seven.18 per cent within the quarter ended June 2021, according to the sharp rise in new investor accounts during the last 18-months and a bounce in retail participation in each secondary and first markets. It stood at 6.42 per cent in Dec 2019.
According to information sourced from primeinfobase.com, the retail possession of NSE listed firms which stood at 6.42 in December 2019 and 6.55 per cent in March 2020, has now hit an all time excessive of seven.18 per cent. The earlier excessive was 7.1 per cent in June 2009. If solely free float (non-promoter holding) is taken under consideration, retail possession by worth share went as much as 14.49 per cent within the quarter ended June 2021, up from 13.86 per cent in March. It stood at 12.75 per cent in Dec 2019.
Even in rupee worth phrases, the retail holding in firms listed on NSE reached an all-time excessive of Rs 16.18 lakh crore from Rs 13.94 lakh crore on March 31, 2021, a rise of 16 per cent. In the identical interval, Sensex and Nifty rose by 6.01 and seven.02 per cent respectively.
“A buoyant secondary market and a flurry of new listings have helped in channelising retail savings into the capital market,” mentioned Pranav Haldea, MD, PRIME Database Group.
Holding of High Net Worth Individuals (HNIs) (people with holding of greater than Rs 2 lakh in an organization), additionally elevated to 2.10 per cent as on June 30, 2021 from 1.98 p.c, taking the mixed retail and HNI holding to an all time excessive of 9.28 per cent.
Even as retail participation has been on an increase since January 2020, the six-month interval between January and June 2021, has witnessed a better momentum. While the retail holding dipped from 7.01 per cent in September 2020 to six.9 per cent in December 2020, it rose considerably over the subsequent six months, which has additionally witnessed report opening of investor accounts and fund mobilisation via IPOs which has seen large retail participation.

From 2.01 crore investor accounts on the finish of January 2020, CDSL noticed its investor accounts greater than double to 4.19 crore accounts by the tip of July 2021. While CDSL added 2.18 crore accounts over final 18 months, over 1.15 crore accounts (52%) have been added during the last six months at a month-to-month common of 19.28 lakh accounts monthly.
As retail buyers and HNIs most popular to take a position instantly into the inventory markets, the mutual funds witnessed a marginal dip of their holding of firms listed on NSE. Data exhibits that MF holding of NSE listed firms got here right down to 7.25 per cent within the quarter ended June 2021.
MF holding has been declining during the last 5 quarters. It stood at 7.96 per cent in March 2020. However, in rupee worth phrases, the holding has almost doubled over the 5 quarters from Rs 8.7 lakh crore to Rs 16.33 lakh crore according to the rise in markets.

While FPI possession hit a 5-year excessive of twenty-two.74 per cent in December 2020, following report fund flows into the Indian equities, their holding has come down during the last two quarters according to a dip in influx of funds, particularly within the final quarter. At the tip of the June 2021, their holding stood at 21.66 per cent. While FPIs invested a internet of Rs 2.74 lakh crore in FY’21 at a mean of Rs 68,500 crore per quarter into Indian equities, the web influx within the quarter ended June 2021 stood at solely Rs 4,602 crore.
Besides, retail, the opposite class that noticed a rise in its holding has been the federal government and the personal promoters. While the holding of presidency (as promoter) in firms listed on NSE elevated to a one 12 months excessive of 6.05 per cent as on June 30, 2021, from 5.70 per cent as on March 31, 2021, because of an enormous run up in PSU inventory costs, the proportion holding of personal promoters in firms listed on NSE elevated to 44.42 per cent from 44.09 per cent on March 31, 2021. Over a 12-year interval, personal promoter possession has been steadily rising. It has elevated from 33.60 per cent on June 30, 2009.