Total household holdings in listed Indian equities now stand at about Rs 84 lakh crore, marking a substantial correction from their peak. Despite this quarterly setback, cumulative wealth accretion since April 2020 remains robust at Rs 53 lakh crore, underscoring the decade-long boom driven by strong market performance and rising investor participation, according to an NSE report.
Individual direct equity ownership held steady at 9.6%, but the value of these holdings fell 2.8% quarter-on-quarter, outpacing the 2.4% decline in total market capitalisation. Households’ effective share, including indirect ownership via mutual funds, remains at a 22-year high of 18.75%.
Foreign portfolio investors (FPIs) continued to retreat, pulling equity holding to a 15-year low of 16.9% in NSE-listed companies. FPI holdings shrank by over Rs 4 lakh crore since a year ago, pushed by net outflows of US$29.6 billion in the past 12 months.
Domestic mutual funds bucked the trend, scaling new highs with equity ownership rising to 10.9% (a record ninth consecutive quarterly increase), supported by retail SIP inflows averaging Rs 28,697 crore per month. DMFs now outpace FPIs in equity ownership for the fourth straight quarter, a feat last seen over two decades ago.
Also read | Tata Motors CV hits top gear on debut post demerger. Here are 7 takeaways from the listing
Market volatility and broad-based selling, especially in largecap stocks, drove the Q2 decline. Promoter and government shareholding saw minor dips in value, while institutional investors moved towards stability by increasing their allocation to top-decile and Nifty50 companies.
Midcap and smallcap exposure from individual investors ticked up, but couldn’t offset the headline wealth erosion driven by valuation corrections across the board.
Despite the sharp quarterly loss, household investors remain a driving force in Indian equity markets, with wealth creation since April 2020 staying firmly positive. Diversification trends are increasing, with individuals and mutual funds now owning nearly one-fifth of the listed market capitalisation—an all-time high.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times.)