Retail shareholding slides to 4-year low amid December-quarter gains

Retail investors appear to be using every rally on Dalal Street to book profits. According to the latest shareholding data for companies listed on the National Stock Exchange of India (NSE), retail shareholding fell to 7.25%, the lowest level since December 2021.

While the benchmark Nifty 50 rose 6.2% in the December 2025 quarter, individual shareholders — those owning up to ₹2 lakh of nominal share capital in a company — along with high net-worth individuals (HNIs), offloaded shares worth ₹57,404 crore.

In contrast, domestic institutional investors (DIIs) bought shares worth over ₹2 lakh crore during the quarter. Foreign portfolio investors (FPIs) also remained net sellers, offloading equities worth ₹13,072 crore.

Retail investors’ ownership in Indian equities had peaked at 7.7% in December 2024. Since then, it has declined by nearly 50 basis points over the past year, according to data from Prime Database Group.

Meanwhile, domestic institutional investors — including mutual funds, insurance companies, banks and other financial institutions — raised their holdings to a record level. Mutual fund ownership climbed to an all-time high of 11.1%, while total DII holding stood at 18.7% as of December 2025. Insurance companies accounted for 5.4%, with the remainder held by other financial institutions.

Promoter holding in NSE-listed companies also slipped to a five-year low of 49.73% during the December quarter and is edging closer to the 49.4% low recorded in March 2019.

Foreign portfolio investors, once considered the dominant non-promoter shareholders in Indian equities, have been steadily trimming their exposure. As of December 2025, FPIs held 16.6% of Indian equities, down sharply from 21.2% in December 2020.

According to Pranav Haldea, Managing Director of PRIME Database Group, FPIs had for years been the largest non-promoter shareholder category, with their investment decisions significantly influencing market direction. That is no longer the case.

DIIs, along with retail investors and HNIs, now play a strong countervailing role, with their combined shareholding reaching an all-time high of 28% as of 31 December 2025.

The trend of retail investors booking profits was also evident during the recent rally following the announcement of a tariff deal with the US. NSE data shows that retail investors sold shares worth ₹6,000 crore between 2 and 3 February, a period during which the benchmark index surged nearly 4%.

During the December quarter, retail investors reduced their stake in 1,092 companies while increasing holdings in 1,019 companies.