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Hans India
23-05-2025
- Business
- Hans India
India needs to further ramp up investments in military hardware, space tech: Report
In response to shifting global dynamics, India will need to significantly ramp up investments in military hardware, space technology, drones, air defence systems, aircraft carriers, smart grids and power infrastructure, a report showed on Friday. 'Operation Sindoor' has showcased a transformative application of advanced air warfare, missile systems, and drone technology, reinforcing the strategic importance of the 'Make in India' initiative. 'As global powers seek to expand their footprint in Southeast Asia, geopolitical uncertainties are expected to intensify,' according to the report by PL Capital. Additionally, the suspension of the Indus Water Treaty is likely to unlock new opportunities across engineering, procurement, and construction (EPC), pumped storage projects (PSPs), and hydroelectric equipment, it added. PL Capital believes geopolitical complexities are on the rise and are likely to intensify in the near future. While the Middle East has long been a region of fragile stability, Southeast Asia now finds itself on the brink of disruption. The growing involvement of global powers in India's neighbourhood is expected to heighten tensions across various fronts, potentially reshaping existing alliances, triggering economic volatility, and increasing the risks of conflict, terrorism, and regional instability, the report mentioned. Recent developments surrounding 'Operation Sindoor' mark a significant step in India's emergence as a global military power. 'However, this also underscores the urgent need for India to accelerate its technological advancement and economic growth in response to these shifting geopolitical dynamics,' the 'India Strategy Report' mentioned. Moreover, the Indian markets, which had been under pressure in recent months due to FII selling, have staged a sharp recovery, delivering a 10% return on the Nifty over the past six weeks. The Q4 FY25 results so far have exceeded expectations, with EBITDA and PBT (excluding Oil and Gas) surpassing estimates by 5.1 per cent and 9.2 per cent, respectively. Also, early signs of recovery are emerging in urban consumption, with a gradual but sustained improvement expected in the coming quarters. In FY25, agricultural production has recorded a growth of 6.8 per cent in Kharif crops and around 3 per cent in Rabi crops. Wheat procurement has reached 29.5 million tonnes, already exceeding last year's 26 million tonnes — a development that will significantly enhance the government's ability to control wheat prices during the off-season, said the report. Additionally, water reservoir levels in May are 22 per cent higher compared to the same period last year. A normal monsoon is expected to sustain elevated water tables, which will positively impact the next Rabi crop as well, said the report.
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Business Standard
08-05-2025
- Business
- Business Standard
1st time: Domestic investors top Nifty-500 holding, FII stake at 10-yr low
In a first, domestic institutional investors (DIIs) now own a larger share of India's top 500 listed companies than foreign institutional investors (FIIs), according to the latest India Strategy Report by Motilal Oswal Financial Services Ltd. (MOFSL). This milestone marks a structural realignment in India's capital markets, driven by strong domestic inflows, persistent FII selling, and expanding retail participation over the past decade. As of March 2025, DII holdings reached a record 19.2% in Nifty-500 companies, overtaking FII ownership, which fell to a decadal low of 18.8%. A decade ago, the FII-DII ownership ratio stood at 2.1x; today, it has dropped to 1x, reflecting the growing dominance of domestic capital. The report highlights that while promoter holdings have slipped to an all-time low of 49.5%, retail investor stakes remain flat, with most of the shift in ownership coming from institutional rebalancing. Over FY15–FY25, DIIs invested $195 billion, a staggering 3.7x more than FIIs (USD 53 billion) during the same period. This change accelerated post-FY21, with India's post-COVID recovery, rising SIP volumes, and mutual fund penetration driving domestic flows. Despite periods of volatility—including the 2024 general elections, global interest rate spikes, and recent geopolitical concerns—Indian markets scaled new highs, underpinned by DII conviction even as FIIs pulled back sharply. The MOFSL report also notes that DIIs increased their holdings across 18 of 24 sectors, with the highest inflows going to Banks (private and PSU), Consumer Durables, Technology, Cement, Insurance, Oil & Gas, and Automobiles—sectors seen as long-term structural plays. Over the past one year, DII ownership rose 160bp YoY (+70bp QoQ) to an all-time high of 19.2% in Mar'25 (vs. 17.6% in Mar'24), while FII ownership dipped 40bp YoY (-10bp QoQ) to an all-time low of 18.8% (vs. 19.2% in Mar'24). Promoter holdings, which have historically remained range-bound, also declined meaningfully by 140bp YoY (down 30bp QoQ) to an all-time low of 49.5% in Mar'25. The sharp drop was driven by a buoyant primary market in 2024, where high valuations and strong investor appetite provided an attractive opportunity for several promoters to liquidate their stakes. Retail holdings were broadly stable and increased marginally by 10bp YoY, but declined 40bp QoQ to reach 12.4% by Mar'25. Sectoral holdings trends: Within the NIfty-500, FIIs and DIIs showcased divergent trends. On a YoY basis, DIIs increased their holdings in 18 sectors (out of 24 sectors) – the top increase in holdings was seen in Banks (Private & PSU), Consumer Durables, Consumer, Insurance, Utilities, Technology, Cement, Oil & Gas, Automobiles, and Retail. In contrast, FIIs experienced a decline in all these sectors, except Technology and Consumer Durables. On a QoQ basis, DIIs increased their holdings in most of the sectors, except NBFC-Non Lending, Consumers, Logistics, and Media. Conversely, FIIs reduced their holdings in most sectors, barring Telecom, NBFCs, Chemicals, Insurance, and Media, which saw an increase QoQ. FII-DII ownership ratio continues to contract As a proportion of the free float of Nifty-500, FII ownership decreased 190bp YoY (-30bp QoQ) to 37.3%, while DII ownership increased 220bp YoY (+110bp QoQ) to 38%. The FII-DII ownership ratio in the Nifty-500 contracted 10bp YoY (flat QoQ) to 1x in Mar'25. Over the last one year, the FII-DII ratio has expanded primarily in NBFC Non-lending, EMS, Infrastructure, Telecom, and Media sectors, while it contracted in 15 out of 24 sectors. Within the Nifty-500 companies, FIIs reduced their holdings in 48% of the companies YoY, while DIIs increased their stake in 67% of the companies. In the Nifty-50, FIIs reduced their holdings in 82% of the companies, while DIIs raised their holdings in 84% of the companies. Analyzing the Caps: Domestic institutions raise their stakes across the board According to SEBI's categorization, large-, mid-, and small-cap stocks accounted for 68%, 21%, and 11% of the total Nifty-500 market cap, respectively. FII, Promoter, and Retail holdings in large-caps dipped to near-lows/the lowest levels of 21.1%, 47.6%, and 10.8%, respectively. In contrast, DII holdings in large-caps rose to an all-time high of 20.4% as of Mar'25. Analyzing the institutional holding patterns: (i) FIIs reduced their stakes in large caps by 50bp YoY, whereas their holdings in mid-caps remained unchanged YoY, and increased in small-caps (+20bp) on YoY basis. On a QoQ basis, FIIs reduced their stakes across all categories by 10bp/60bp/10bp to 21.1%/14.7%/12.2%; ii) DIIs significantly raised their stakes across market caps by 200bp/80bp /60bp YoY (+60bp/+50bp/+20bpQoQ), to 20.4%/17.1%/ 15.2%; and iii) Promotors notably reduced their YoY holdings across market caps (-160bp/-130bp/-30bp YoY and 30bp/+40bp/+10bp QoQ) to 47.6%/54.9%/51.4% as of Mar'25. Notably, Promoter holdings in large-caps dipped to an all-time low, while holdings in mid-cap stocks reached the second-lowest level and remained low in small-caps; iv) Retail holdings were near their lows in large- and mid-caps at 10.8% and 13.3%, respectively, while their holdings remained strong in small-caps at 21.2%.
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Business Standard
08-05-2025
- Business
- Business Standard
Who is buying what? PSUs emerge as investor darling both FIIs and DIIs
Public Sector Undertakings (PSUs) have become the top destination for both Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs), signaling a powerful shift in market sentiment toward India's state-owned enterprises. According to Motilal Oswal Financial Services Ltd.'s latest India Strategy Report, PSU stocks saw a surge in institutional interest in FY25, with FII holdings rising to 18.1% (up 140bps YoY), while DII holdings hit a record 18.8% (up 120bps YoY). This makes PSUs the only segment within the Nifty-500 to attract record-high interest from both investor classes simultaneously. This is in stark contrast to private companies, where FII ownership slid to a decade-low 20.1%, down 90bps YoY. Even as primary and secondary market buoyancy led to increased equity dilution among private promoters, their overall holdings fell to an all-time low of 47.5% in the Nifty-500. The quiet rise of PSUs The institutional rush into PSUs is underpinned by a combination of value, visibility, and reform-driven potential. Promoter stakes in PSU firms dropped to 54.1% in Mar'25 (from 56.8% YoY), indicating that the government has actively been reducing its stake—creating more float and investable space for institutions. Both FIIs and DIIs appear to be betting on re-rating potential in sectors like PSU Banks, Oil & Gas, Utilities, and Insurance—all traditional PSU strongholds that are now benefiting from improved balance sheets, digitization, and capital infusion. FIIs significantly raised their stakes in BFSI (34.4% allocation), with top bets in Private Banks, NBFCs, and Telecom. Notably: FII holdings in NBFC – Non-Lending rose +400bps YoY Telecom up +200bps Real Estate up +170bps Their top 5 stock holdings include: HDFC Bank – $89.2B ICICI Bank – $61.5B Reliance Industries – $41B Bharti Airtel – $30.6B Infosys – $30.3B FIIs were overweight on Private Banks, Telecom, and Real Estate but underweight on PSU Banks, Consumer, and Capital Goods. DII bets DIIs increased stakes across 18 out of 24 sectors, with the highest YoY increases in: Consumer Durables (+290bps) Utilities (+220bps) Top sectoral exposures for DIIs include: BFSI – 27.3% Consumer – 9.8% Technology – 9.3% Oil & Gas – 8.5% Automobiles – 7% Their top 5 stock holdings: HDFC Bank – $50.1B ITC – $41.8B ICICI Bank – $40.3B Reliance – $38.4B Infosys – $26B Interestingly, while DIIs are heavy on Consumer and Oil & Gas, they remain underweight on Private Banks and NBFCs despite increasing exposure. Retail Holding: Flat Retail investors have maintained a steady stake in the Nifty-500, with ownership stable around 12–13% over the past three years. As of Mar'25, their allocation stood at 12.4%, with top sector bets in BFSI (23.8%), Capital Goods (10.3%), and Consumer (8.3%).
