Stock market: Promoter holdings hit 3-year high; is it a sign of market bottom?

Promoter holdings in NSE-listed private sector companies rose to a three-year high of 41.93 per cent in the September quarter, marking a second consecutive quarterly increase after a prolonged decline since December 2021. The trend is a telling sign of the market bottoming out, with promoter buying generally viewed as a positive signal, said Pranav Haldea, Managing Director at PRIME Database Group.

"While promoter selling can be due to a wide variety of reasons, promoter buying is always a positive sign," Haldea said in a note.

Data showed private promoters were net buyers for the fourth consecutive quarter, purchasing shares worth Rs 6,595 crore in Q2.  These private promoters bought shares worth Rs 36,336 crore on a net basis in Q1, which was the highest in 4 years.

As promoter holdings jumped, direct individual investor holdings, as well as indirect holdings via mutual funds also increased, as FPIs and LIC holdings fell.

During the quarter, HNI holding of NSE listed companies increased to 9.50 per cent as on September 30, up from 9.46 per cent as on June 30. While the share of retail investors decreased from 7.35 per cent to 7.32 per cent, the share of HNI investors increased from 2.11 per cent to 2.19 per cent during the quarter, PRIME Database said while citing Rs 26,889 crore worth of outflows from individual investors during the quarter.

The holdings of promoters of private sector companies has increased in the last two quarters after having declined in an almost secular manner from December 31, 2021 onward when it stood at 45.15 per cent.

While the share of ‘Indian’ private promoters had gone down from 36.89 per cent as on December 31, 2021 to 32.21 per cent as on March 31, the share of ‘foreign’ promoters had gone up marginally from 8.25 per cent to 8.36 per cent during this period.

This has now increased to 32.92 and 9 per cent respectively as on September 30, 2026.

Meanwhile, the share of domestic mutual funds (MFs) in companies listed on NSE, through which mostly individual investors invest indirectly, reached yet another all-time high of 11.82 per cent as on September 30, 2026, up from 11.58 per cent as on June 30, 2026, the 13th consecutive quarter of increase.

Haldea said this is a further sign of individual investors being convinced that "mutual funds sahi hai".

"Despite markets being broadly range-bound over the last couple of years, it will be interesting to see if they continue with the faith and pumping in Rs 30,000 crore on a monthly basis through Systematic Investment Plans (SIPs)," he said.