Context:
When it comes to the market movement on a day, in addition to the fundamental factors, there are many other influences on the market move which include the macro economy, business cycle, policies, sentiments, key events etc. This influence is accounted by key set of players namely the promoters, FIIs, DIIs and the Public. It is not clear as to how promoters influence on a daily basis, but their influence can not be ruled out, and let us leave it at that. Then there can be unison or diversion between FIIs and DIIs. Now a days, the DIIs bring more money to the table, but historic investments of FII make them still very influential. The general public too is becoming a force to reckon with, but they tend to be more swept by sentiments and moves by other three.
Focus:
Here is an attempt to understand the influence different players can play on nifty scripts. If this analysis becomes useful, then one can trade nifty stocks with more confidence and intuision as one is aware of the influences of various parties on the script associated. The success from this research if confirmed, phase 2 is to extend to Nifty next 50, and in phase 3 to all the F&O stocks. There may be some value for investment decisions too, but that factor is ignored for now.
1. Top 10 Market Cap stocks perspective:
The picture above makes it clear as to who they are. Apparently the Nifty weightage can be out of whack with the Market Cap weightage. When a high market cap stock moves, it tends to carry many other stocks behind it.
Top 10 market cap stocks make out almost 50% of Nifty market cap. Nifty weightage is quite close, 52%.
There is a distribution of promoter holding % across these 10 stocks. Highest promoter holding is with TCS at 71.77% and least with HDFC Bank, ICICI Bank and ITC at zero.
Highest FII holding is with HDFC Bank at 48.02%, and least with SBI at 10.71%.
Highest DII holding is with ICICI Bank followed closely by ITC. Least DII holding is with TCS at 10.86%.
Highest public holding % is with HDFC Bank at 16.75%, and the least with Bharti Airtel at 2.89%.
Average market cap of Top 10 market cap stocks in nifty is approx. 980Kcrore while across entire Nifty 50 it is approx. 400K crore. Top 10 market caps have an average weightage of 5% while the entire nifty stocks have 2% each.
Key thing to note on Top 10 Market Cap stocks is that the influence of FII and DII is equally placed overall. Public can match that only by 40-42%. We are yet to hear of public share holder activism in the market, then such an info becomes more useful.
2. Nifty level averages:
The following are the key values to remember at Nifty 50 level:
Average promoter %: 42.98
Average FII %: 23.89
Average DII %: 20.16
Average public %: 12.52
DII and Public % together it is 32.68%
Market Cap Total: 199 Lakh Crores
Market Cap Average: approx. 400 K Crore.
3. Promoter Perspective:
3.1. Top 10 Promoter holding stocks in Nifty 50:
Adani Enterprises is at the top with 74.89% promoter holding, Ultra Tech at the low at 59.98%. Average is at 65.46%. Average market cap of these stocks is approx. 472 K Cr. These stocks have market cap weightage of only 23.65%, and nifty weightage is only 14%. All other stakeholders have lower holding, but the DIIs are comparable to FII, and public are also quite close to both at above 90%.
3.2. Bottom 10 Promoter Holding stocks in Nifty 50:
The lowest promoter holding is at 0% for L&T, ITC, ICICI Bank and HDFC Bank. Highest promoter holding in the list is approx. 25.89% for Kotak Mahindra Bank. Average promoter holding is approx. 10.9%.
So, obviously the other stakeholders are stronger here, FII on average is 40.85%, DII on average is 33.38%, and public at 14.34%. So, FIIs have an upper hand therefore.
Average market cap of these stocks is approx. 537 K Cr.
While these 10 stocks have combined 26.88% in market cap weightage within nifty, nifty weightage is much high at 42%. So, the move in these stocks has higher amplitude on the index therefore.
Bottom line: Nifty weightage is designed to be less if the promoter holding is higher.
3. FII perspective:
3.1. Top 10 FII Holding stocks within Nifty 50:
The highest FII holding % is with Shriram Finance at 54.26%, lowest with Kotak Mahindra Bank at 33.16%, average at 43.21.
DII % average being 31.33, their influence comes short when compared to FII. Publics have 11% to make the difference between the two.
Promoters holding average is also low at 13.83%.
Average market cap is at 498K Cr, market cap weightage is 24.95%, but nifty weightage is 39. So, it is advantage FIIs in the top FII holding stocks as to market move amplification.
3.2. Least FII holding 10 stocks in Nifty 50:
Least FII holding is with Wipro Ltd ar 7.27%, and the best within the list is 13.69% with Grasim industries. The average FII holding is at 10.55%. Promoters at 62.73%, DIIs at 13.91% with upper hand when compared to FII %, and public too at impressive 11.67%. So, one can say, FII influence on daily move of these stocks is the least within the Nifty 50.
No wonder, the market cap weightage is at 24.37% while the nifty weightage lags at mere 15%.
Average market cap is at 486K Cr.
4. DII holdings perspective:
4.1. Top 10 DII Holding stocks in Nifty 50:
Best DII holding % is at 44.45% with ICICI Bank, and the least in the list is NTPC Ltd with 27.55%.
FIIs match the DIIs here with average of 36.37%, slightly more than DII average of 35.09%. The public are at 14.24%, behind the promoters at 15.11%.
Market Cap weightage is at 27.28%, and the Nifty weightage is at 42%. So, the move in these stocks does matter to the index.
Average market cap is at 545 K Cr.
4.2. Least DII holding 10 stocks in Nifty 50:
The least DII holding is with Adani Enterprises at 6.46%, and the best in the list is 11.84% with Eicher Motors. Average DII holding is 9.61%.
Compared to this, the average holdings of promoters is at 59.51%, FIIs at 16.51%, and public is at 14.21%.
Market Cap weightage is at 18.81%, nifty weightage is mere 12%. So, in general Nifty does not move much when these stocks move.
Average market cap is at 376 K Cr.
Public are superior to DII on these stocks though they come short against FII.
5. Public Holding Perspective.
5.1. Top Public Holding 10 stocks in Nifty:
Top public holding is with L&T at 37.6% and the least in the list is at 19.68% for Asian Paints. Average public holding is at 24.25%, much higher that FIIs at 19.34% and DIIs at 17.81%. So, if there can be public holding activism, these 10 stocks are ideal candidates. Promoter holding is at 38.47%.
Average market cap is at mere 256K Cr. Market Cap weightage is at 12.84%, Nifty weightage is at 14%. Bottom line, the move here does not impact the index much, especially given lack of activism and unison among public holders.
5.2. Least 10 public holding stocks in Nifty 50.
Least public holding is with Bharti Airtel at 2.89%, best in the list is with Sriram Finance at 5.07%. Average public holding is only 4.06%. Fair to say that public sentiments do not matter to these stocks. Promoter holding is at 54.92%, FII at 21.83%, DII at 18.09%.
Average market cap is at 508K Cr. Market Cap weightage is at 25.43%, Nifty weightage is at 18.
6. Various contrasts and combinations seeking further distinctions:
6.1. Top 10 stocks within Nifty 50 where DIIs have more influence than FIIs.
On a head to head basis, strongest DII presence against FII is with Coal India Lts at 2.46 times holding, and the least in the list is Hindustan Uniliver at 1.19%. Average leverage is at 1.67 times.
Average promoter holding is at 49.64%, FIIs at 13.97%, DIIs at 22.58%, public at 12.56%.
Average market cap is at 371 K Cr. Market cap weightage is at 18.6%, Nifty weightage at 15%.
So, when DIIs move up or down with huge amount, watch these stocks more for more amplified moves.
6.2. Top 10 stocks within Nifty 50 where FIIs have more influence than DIIs.
The best FII influence is on Shriram Finance Ltd at 54.28% and the least in the list is at 11.31% with Adani Enterprises. The average FII % is at 29.21%, DII at 13.08%, public at 10.53% and promoters at 47.06%.
From the DII to FII holding ratio perspective lowest is at 0.28 for Shriram Finance, the best in the list is not the Adani Enterprises, rather SBI Life Insurance Company at 0.61. Average ratio here is 0.48 meaning DIIs are at 52% compared to FII at 48%, a marginal leverage of sorts.
So, if there is a fight between the FIIs and DIIs, it will be intensive on these stocks, so these tocks can be more volatile on such days.
Average market cap is at 215 KCr, Market Cap weightage is at 10.76%, Nifty weightage is at 9%.
6.3. Top 10 stocks with public holding dominance over FIIs
Best public holding % against FIIs is with Bajaj Finserv at 2.76 times, and the least at .99 times with Tata Motors. Average public holding % in the list is 1.53%. Rarely public will combine their might together and go against FII might, when that happens, this list becomes more relevant. But the dominant DIIs can leverage public sentiment to counter FIIs here.
Promoter holding average is at 48.46%, FII at 14.46%, DII is at 15.77%, public at 21.17%.
Market Cap average is at 323K Cr, market cap weightage at 16.19%, Nifty weightage is at 15%.
6.4. Top 10 stocks with strong public holding against both FII and DII
This list is slightly different as the public holding % is compared to the average of FII and DII % than stand alone basis.
Bajaj Finserv remains on the top with 2.91 times more holding, and the least in the list is JSW Steel at 1.22 times. The average ratio is 1.61.
So, if there is a public level activism, the public can sway better against these stocks assuming the promoters remain neutral.
The promoter % average is 48.17%, FIIs at 16.42%, DIIs at 13.83%, Public at 21.37%.
Average market cap is at 288K Cr, market cap weightage at 14.41%, Nifty weightage at 13%.
6.5. Top 10 stocks with best of total DII and Public holdings in Nifty 50
Hypothetically, if DIIs and Public holders combine forces, they can sway better on these stocks. Highest combined holding is at 78.04% with L&T, least in the list is with TCS at 41,79%, average combined is at 51.74%.
Average promoter holding is at 16.7%, FIIs at 31.28%, DIIs at 31.09%, public at 20.65%.
The average market cap is at 475K Cr, market cap weightage is at 23.8%, Nifty weightage is at 37%.
So, at the least Publics can follow DII trend and amplify the moves on these stocks easily relatively. So, trade with these stocks when DIIs are pouncing with these.
7. Whether it is a weekly Top 50 MF report or special MF report, or this kind of special blog, these are availble in the blog site indicated below. Blogs are also rendered as videos (on Youtube and Instagram) for those not prefering to read.
Blog: NatsFunCorner! on Blogger
https://natsfuncorner.blogspot.com/
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Disclaimer:
1. Cant promise that all observations here can be leveraged for trading. But, this knowledge is useful to know a Nifty 50 stock better in finger tips, so the intuition becomes better accurate and acute sharp for trading.
2. This is niether a solicitation nor recommendation to trade on specific stocks.
3. Nifty and holding data changes regularly if not daily. This data is based on snapshots of data available on the internet on Oct 17, 2024.
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