DII holdings of BSE 100 firms soar in Q1

MUMBAI: A massive liquidity surge in mutual funds and insurance companies has pushed the combined shareholding of domestic institutional investors (DIIS) in India’s largest listed companies to a 25-quarter high.

Market data showed that at the end of June, domestic institutions held a 14.22% stake in 93 companies on the BSE 100 index. The share of DIIS in these same companies was at 13.52% in the corresponding quarter last fiscal.

The BSE 100 makes up 70.40% of India’s market capitalisation. Traditionally, BSE 100 companies have accounted for close to 70% of fund allocations by DIIS.

In the three months to June, DIIS collectively pumped in ₹12,992.62 crore in Indian shares despite volatility in stock markets due to the strict lockdown.

Measures imposed in Marchend brought business activity to a sudden halt, but as India unlocked gradually, there was a fast normalisation of activity and most market participants expected the economy to revive quickly on pent-up demand.

Analysts said fund managers mostly bet on the belief that Indian fundamentals are wellplaced, making India a longterm growth story, which led to a massive shift of funds from real estate and bank deposits to equities.

On May 12, PM Narendra Modi announced a special economic package worth ₹20 lakh crore.

“The government’s response to the economic crisis instilled confidence in institutional investors to remain bullish on Indian markets. Also after the steep market corrections in March, many companies were available for cheap, which led to further buying by DIIS,” said an analyst asking not to be named.