Promoters Increase Stake in Private Firms for Second Straight Quarter

Promoters of private firms increased their stake to a three-year high of 41.93% in the September quarter, signaling a market recovery. Meanwhile, mutual fund ownership hit a record high, while FII exposure dropped to a 14-year low.

Promoter Shareholding Trends

Promoters of private sector companies increased their stake in listed firms for the second consecutive quarter, taking their combined shareholding to a three-year high of 41.93 per cent as of September 30, 2026, according to data released by PRIME Database Group. The shareholding of private promoters rose from 41.34 per cent in the June quarter to 41.93 per cent in the September quarter, indicating a gradual recovery after several years of decline.

Private promoters were net buyers of shares worth Rs 6,595 crore during the September quarter, marking their fourth consecutive quarter of net buying. They had purchased shares worth Rs 36,336 crore in the previous quarter, the highest net buying in four years. Promoter ownership had been on a declining trend since December 2021, when their combined shareholding stood at 45.15 per cent.

Breakdown of Promoter Ownership

The share of Indian private promoters fell from 36.89 per cent in December 2021 to 32.21 per cent in March 2026, while foreign promoters' share increased marginally from 8.25 per cent to 8.36 per cent during the same period. However, both categories recorded an increase in the September quarter. The shareholding of Indian private promoters rose to 32.92 per cent, while that of foreign promoters increased to 9 per cent.

Commenting on the trend, Pranav Haldea, Managing Director of PRIME Database Group, said the continued rise in promoter ownership could indicate that the market is approaching a bottom. "As anticipated in our previous quarter's report, this is now a continuing telling sign of the market bottoming out. While promoter selling can be due to a wide variety of reasons, promoter buying is always a positive sign," Haldea said.

Institutional Investor Shifts

Meanwhile, domestic mutual funds continued to increase their holdings in Indian equities, with their shareholding in NSE-listed companies reaching a fresh all-time high of 11.82 per cent in the September quarter, compared with 11.58 per cent in the previous quarter. This marked the 13th consecutive quarter of increase in mutual fund ownership.

In contrast, Foreign Institutional Investors (FIIs) continued to reduce their exposure to Indian equities, with their shareholding declining to a 14-year low of 15.57 per cent as of September 30, 2026, from 15.91 per cent in the June quarter. The gap between mutual funds and FII ownership narrowed by 58 basis points during the quarter to 3.75 percentage points. This gap has more than halved over the past two years, from 8.09 percentage points in September 2024.

Overall, domestic institutional investors (DIIs) increased their shareholding in NSE-listed companies to an all-time high of 19.31 per cent in the September quarter, compared with 19.16 per cent in the previous quarter. The increase came despite a decline in the shareholding of insurance companies, which fell from 5.18 per cent to 5.05 per cent during the quarter. The data points to a shift in ownership patterns in the Indian equity market, with domestic promoters and mutual funds increasing their stakes, while foreign institutional investors continue to reduce their holdings.

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