Retail investor shareholding in private banks has declined by up to 278 basis points in the fourth quarter of FY25 compared to the previous quarter with smaller and mid-sized lenders seeing a steeper drop. On an average, retail shareholding in private banks fell by 29 bps, while in public sector banks, the decline was marginal at 2 bps.
Of the 17 listed private sector banks, 11 reported a fall in retail investor stakes, according to the latest shareholding data filed with stock exchanges. Domestic institutional investors (DIIs), on the other hand, appeared more optimistic. They raised their holdings in nine private banks, reduced exposure in six, and maintained stake in two.
“Changes in ownership patterns often reflect investors’ expectations ahead of quarterly results. The recent reshuffling indicates optimism around certain stocks, especially where fundamentals are perceived to be improving,” said a banking analyst at a brokerage firm.
South Indian Bank and RBL Bank witnessed saw retail investor shareholding falling by 278 bps (to 51.82%) and 258 bps (to 22.15%), respectively while J&K Bank saw retail shareholding declining 0.69% to 19.48%. In other private banks, which saw fall in retail participation, the shareholding fell between 7-59 bps.
IndusInd Bank, country’s fifth largest bank, witnessed increase in ownership of retail investors. The bank saw retail investors shareholding increasing by 141 bps to 8.73% during the fourth quarter.
DIIs have cut their exposure to IndusInd Bank to 34.98% in the January-March quarter from 39.65% in October-December quarter, reflecting a decline of 467 bps. Last week, the bank said that the report by an external agency showed `1,979 crore of impact to the net worth due to the discrepancy in its derivative portfolio. The amount represents 2.27% of the bank’s net worth as of December 2024, slightly below the 2.35% it had previously estimated. The bank had appointed an external agency to independently review its internal findings to determine the accounting treatment of any resulting impact on its financial statements.
Axis Bank and South Indian Bank witnessed significant increase in DIIs shareholding in the fourth quarter. DIIs shareholding in Axis Bank increased by 348 bps to 39.52% while in South Indian Bank their shareholding increased by 317bps.