In a first since 2010, domestic investors overtake FPIs as shareholders

After the massive sell-off since October, foreign portfolio investors (FPIs) are no longer the biggest non-promoter-shareholders in top Indian companies.

This has happened for the first time in over a decade.

“At 25.6 per cent ownership of India's largest 75 companies, domestic investors are now larger holders than FPIs for the first time since 2010,” said Morgan Stanley strategists Ridham Desai, Sheela Rathi and Nayant Parekh in a note.

Since 2014, FPI ownership in top-75 companies has declined by 232 basis points to 24.8 per cent.

On the other hand, domestic mutual funds (MFs) have increased their ownership by a massive 580 bps to 9.5 per cent and individual investors by 157 bps to 9 per cent.

The shareholding of domestic financial institutions, which includes insurers and banks, has slipped 17 bps to 7.1 per cent.

All the three combined own a little over a fourth of top 75 companies. Indian promoters remain the biggest shareholders with 44.9 per cent stake.

Given their growing clout, Morgan Stanley handed over the baton of ‘price setters’ to domestic investors.