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The sharp decline of over 30 per cent in most stock prices in the March quarter may have rattled many, but high networth individuals (HNIs) seem to have been on a buying spree in that period.
A BusinessLine analysis of the changes in shareholding patterns of companies in the BSE 500 index shows that the shareholding of HNIs in those stocks increased sharply to 4.1 per cent in the March 2020 quarter, from 1.8 per cent in the December 2019 quarter.
The analysis is based on companies in the index that have disclosed the changes in their shareholding pattern so far.
Promoters, too, have increased stakes by 1.9 percentage points in the quarter. The buying spree of HNIs and promoters was predominantly in the banking and financial services sector.
The stake of domestic institutions — including mutual funds and insurance — in the stocks broadly remained the same in the March quarter.
But foreign portfolio investors (FPIs) have offloaded their shares amid the market crash, reducing their stake from 22 per cent in December 2019 to 20.5 per cent in March 2020.
On the other hand, retail investors (individuals with shareholding of up to ₹1 lakh in a stock) have trimmed their holding by 2.1 percentage points to 4.3 per cent in March.
HNIs’ pick
Among the top 10 stocks that saw a sharp increase in HNI investors’ stake, three are from the banking and financial services industry — Ujjivan Financial Services, GIC Housing Finance and City Union Bank. Of this, Ujjivan saw the highest increase in stake, going up from 10.7 per cent in December 2019 to 37.5 per cent in March 2020. GIC Housing Finance witnessed a 26.2 percentage points increase.
These investors have, meanwhile, reduced stakes in companies such as Finolex Industries (2.6 percentage points), GHCL (1.3 percentage points), Welspun Corp (1.3 percentage points) and IIFL Finance (1.2 percentage points).
Retail investors sell shares
As the market crashed and HNI investors bought more stocks, retail investors (individuals with up to ₹1 lakh shareholding) increasingly sold them. The shares sold by them in the March quarter were mostly picked up by HNIs.
Retail individual investors’ holding in nearly 167 companies (out of 309) fell to zero in the March quarter. However, they also bought some shares — South Indian Bank (up 3 percentage points), Canara Bank (2 percentage points), Reliance Power (2 percentage points), GHCL (2 percentage points) and Raymond (2 percentage points).
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