Who owns India Inc? NSE's August Market Pulse report offers cues

The latest Market Pulse report from the NSE, a monthly review of Indian economy and markets, offered a detailed look at the shifting shareholding patterns across corporate India. The findings suggested that while domestic mutual funds (DMFs) continue to gain strength, foreign portfolio investors (FPIs) are showing greater caution, preferring safety in large caps amid global uncertainty.

Promoter ownership slipped for the fourth consecutive quarter, settling at 50 per cent for NSE-listed companies in June 2025, a nine-quarter low. In the Nifty 50 universe, the decline was sharper, with promoter stakes dropping to 40.2 per cent, the lowest in nearly 23 years. Much of this fall was led by private Indian and government promoters, Market Pulse's August edition suggested.

On the other hand, domestic mutual funds hit a record high, raising their share to 10.6 per cent (8.6 per cent active, 1.9 per cent passive). Backed by robust SIP flows, DMFs, along with other domestic institutions, now collectively hold more than FPIs for the second straight quarter — a position last seen in 2003. Interestingly, DMFs also fine-tuned their bets: trimming exposure to large-cap financials, softening their negative stance on consumer staples, and turning more constructive on materials and select consumer durables.

Meanwhile, FPI ownership in NSE-listed firms fell to 17.3 per cent, the lowest level in more than 13 years. But within the Nifty 50, their exposure climbed to a six-quarter high of 24.5 per cent, underlining a clear tilt toward large-cap names. FPIs also increased allocations to financials and communication services, while staying cautious on consumption and commodities such as energy, materials, and industrials.

Retail participation continues to inch higher. Direct individual holdings rose to 9.6 per cent, and when combined with mutual fund ownership, households now command a record 18.5 per cent of the market. Household equity wealth surged by nearly Rs 9 lakh crore in Q1FY26, lifting total gains since April 2020 to around Rs 60 lakh crore.

Sector-wise, the June quarter also highlighted a divergence: while FPIs reinforced their overweight position on financials, DMFs took a more balanced approach. At the same time, mid- and small-cap stocks outperformed, pulling investors slightly away from the Nifty50-heavy portfolios that had dominated in the March quarter.

The government’s presence in corporate India also showed mixed trends. After slipping in FY25, its ownership in NSE-listed and Nifty 500 companies ticked up modestly to 10.1 per cent and 10.9 per cent in Q1FY26. This was partly aided by PSU banks, with the Nifty PSU Bank Index rising 15 per cent, outpacing the broader market’s 10.9 per cent return.