Domestic Mutual Funds (MFs) and Domestic Institutional Investors (DIIs) are gaining prominence in the Indian share market, as foreign institutional investors (FIIs) pulled out last quarter.
The share of domestic Mutual Funds (MFs) in companies listed on the NSE rose to an all-time high of 9.17 per cent QoQ as of June 30, 2024, from 8.93 per cent, fueled by strong net inflows this quarter, according to primeinfobase data.
Stock Picks By Mutual Funds: In the previous quarter, the top 5 companies that saw the highest buying by mutual funds were: HDFC Bank Ltd. (Rs 17,345 crore net buy), Kotak Mahindra Bank Ltd. (12,425 crore), Persistent Systems Ltd., Infosys Ltd., Reliance Industries Ltd.
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Bharat Electronics Ltd., State Bank of India, and Hindustan Petroleum Corp. Ltd. witnessed the highest selling by mutual funds.
DII Vs FII
The share of Domestic Institutional Investors (DIIs) surged 20 bps to 16.23 per cent during the quarter. Meanwhile, with foreign institutional investors (FIIs) pulling out Rs 7,693 crore from the market during the quarter, their share declined 34 bps to a 12-year low of 17.38 per cent. So the gap between FII and DII holding has narrowed to its lowest ever level, with DII holding just 6.60 per cent lower than FII holding.
According to Pranav Haldea, Managing Director, PRIME Database Group Indian markets are rapidly moving towards "atmanirbharta" (self-reliance), with DIIs' share set to overtake that of FIIs in the next few quarters.
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In the previous quarter, Vodafone Idea Ltd., JSW Energy Ltd., and Indus Towers Ltd. were the top three companies witnessing the highest FII buying, while FIIs significantly reduced their holdings in Kotak Mahindra Bank, Adani Enterprises, and Larsen & Toubro.
Companies with the highest DII holdings include HDFC Bank Ltd., Reliance Industries Ltd, and ICICI Bank Ltd. During the previous quarter, HDFC Bank Ltd. witnessed the highest DII buying, while Hindustan Petroleum Corp. Ltd. and Bharat Electronics Ltd. experienced the highest DII selling.
Shift In Investment Pattern
The latest investment patterns show DIIs increasing their allocation to commodities (from 7.91 per cent to 8.73 per cent QOQ) and decreasing their stake in energy (11.53 to 10.64 per cent). Meanwhile, FIIs increased their allocation most to Consumer Discretionary (16.23 to 17.13) while they decreased their allocation most to IT (8.93 to 8.09 per cent).
The largest companies in which the trinity of Promoters, FIIs and DIIs all increased their stake during the quarter are ICICI Lombard General Insurance Co., Deepak Nitrite, Jindal Saw, KSB, etc.
