1. Promoter stakes in Nifty 500 fell to a record 49.3% in Q1 FY26, driven by primary market sales.
2. DIIs’ ownership hit 19.4%, offsetting promoter cuts; FIIs stayed at 18.8%, retail at 12.4%.
3. DIIs bought retail, PSU banks, cement, and tech; FIIs cut utilities, autos, oil & gas, but added BFSI, telecom, infra.
The Indian equity market navigated a choppy June quarter, shaped by heightened geopolitical tensions, modest earnings, and subdued consumer demand. Despite the headwinds, the equity market showcased resilience in the face of sustained buying by domestic investors, helping it stage a recovery from the lows of March.
Amid the quarter’s uneven performance, ownership patterns in Nifty 500 companies underwent a marked shift. Taking advantage of the rebound in valuations, promoters pared their stakes to record lows. According to data from Motilal Oswal Financial Services (MOFSL), overall promoter shareholding fell to 49.3%, a drop of 170 basis points on year and 20 basis points compared with the previous quarter.
MOFSL attributed this decline largely to the revival of the primary market in Q1 FY26, where strong valuations and sustained investor appetite presented an opportune moment for promoters to liquidate portions of their holdings.
In contrast, the relentless buying by DIIs powered their stake in Nifty 500 companies to an all-time high of 19.4%, a rise that mirrors the quantum of decline in promoter holdings, the MOFSL study showed. On the other hand, foreign institutional investors’ (FIIs) stake in Nifty 500 companies remained largely stable at 18.8% while retail holdings also stood unchanged at 12.4% by the end of Q1.
Within the Nifty-500 companies, FIIs reduced their holdings in 53% of the companies on year, while DIIs increased their stake in 74% of the companies, MOFSL stated.
Within the Nifty 500 universe, FIIs and DIIs showcased divergent trends. On a year-on-year basis, DIIs increased their holdings in 20 out of the 24 major sectors with the biggest increase in holdings seen in retail, PSU banks, consumer, cement, utilities, private banks, technology, and EMS, while those that saw a reduction in holdings were infrastructure, media, NBFC, non-lending, and metals.
On a sequential basis, DIIs clocked in the sharpest increase in holdings in the EMS, retail, telecom, technology, and logistics sectors.
On a sequential and on year basis, however, FIIs increased their stakes in infrastructure, NBFC non-lending, telecom, and media. On an on year basis, FIIs reduced their holdings in 13 sectors with the maximum cut in ownership seen across utilities, retail, automobiles, oil & gas, cement, logistics, consumer, consumer durables, capital goods, PSU banks, and healthcare.
Within Nifty 500, the top sectoral holdings of DIIs, which accounted for 61.4% of the total allocation belonged to BFSI (27.5%), consumer (9.2%), technology (9%), oil & gas (8.7%), and automobiles (7%). The top stock allocations went toward HDFC Bank ($55.8-bn), Reliance ($46.6-bn), ICICI Bank ($43.3-bn), ITC ($42.5-bn), and Infosys ($27.5-bn).
Meanwhile, FIIs remained significantly more bullish on the financial space as compared to other sectors in the Nifty 500 universe. Their ownership in the BFSI sector rose 350bp on year and 50bp on quarter to 34.9% in Nifty 500 as of June end, the highest in the seven quarters.
Amongst individual companies, MOFSL noted that FII holdings stood the highest in HDFC Bank ($99.9-bn), ICICI Bank ($68.4-bn), Reliance Industries ($48.9-bn), Bharti Airtel ($37.7-bn), and Infosys ($30.6-bn), which cumulatively made 31% of total FII holding value. It’s worth noting that four of these stocks also featured among the DIIs’ top holdings, pointing to an alignment of top stocks where FIIs as well as DIIs chose to park their money.