FII ownership in Nifty-500 hits five-year low during Q4; promoter holdings up post-COVID-19 outbreak: Motilal Oswal

Mumbai: Foreign institutional investor (FII) holdings in the Nifty-500 hit a five-year low in the fourth quarter ended March, declining 140 basis points quarter-on-quarter and 80 basis points year-on-year to 21 percent.

According to India strategy report released by Motilal Oswal Financial Services on Thursday, FIIs reduced ownership in 67 percent of Nifty-500 and 90 percent of Nifty-50 companies quarter-on-quarter.

Both FIIs and domestic institutional investors (DIIs) increased stake in telecom on a quarter-on-quarter basis by 190 and 220 basis points respectively.

The report takes a deep dive into the ownership of various sectors and companies in the Nifty-500 to see how it has changed during Q4 FY20.

In the Nifty-500, FIIs have the highest ownership in private banks (44.6 percent), followed by NBFCs (35.6 percent), telecom (21.7 percent), oil and gas (21.3 percent) and real estate (20.4 percent).

Over the last five years, incremental dominance of domestic capital savings has gone up with consistent and rising SIP investments along with a shift toward financial savings.

Consequently, the FII-DII ownership ratio in the Nifty-500 is at a new low and has declined to 1.4x from 2.2x in the last five years.

Further, promoters took advantage of the sharp correction post the COVID-19 pandemic and raised ownership. Thus promoter holdings in the Nifty-500 companies increased 130 basis points quarter-on-quarter and 150 basis points year-on-year to 50.5 percent in Q4 FY20.