Indian promoters are quietly increasing their bets on their own companies even as foreign investors retreat to their lowest ownership level in 14 years, in a shift that could signal the market is finally nearing a bottom.

The share of promoters in private sector companies listed on the National Stock Exchange rose to a three-year high of 41.93% as of Sept. 30, 2026, from 41.34% three months earlier, according to data from Prime Database.

Private promoters were net buyers of shares worth Rs 6,595 crore during the September quarter, marking their fourth consecutive quarter of net buying. Their purchases had reached a four-year high of Rs 36,336 crore in the quarter ended June 30.

“While promoter selling can be due to a wide variety of reasons, promoter buying is always a positive sign,” said Pranav Haldea, managing director of Prime Database Group.

“As anticipated in our previous quarter’s report, this is now a continuing telling sign of the market bottoming out,” he said.

The increase marks a reversal from a prolonged decline in promoter ownership. The share of private sector promoters had fallen almost consistently from 45.15% in December 2021 to 41.34% in June this year before recovering over the past two quarters.

Indian private promoters accounted for 32.92% of ownership as of September, up from 32.21% in March. The share of foreign promoters rose to 9% from 8.36% during the same period.

The promoter buying comes against a sharp decline in foreign ownership. The share of foreign institutional investors, including foreign portfolio investors, foreign direct investment, sovereign wealth funds and depositary receipts, fell to a 14-year low of 15.57% as of Sept. 30, from 15.91% at the end of June.

Domestic mutual funds, meanwhile, reached another all-time high, with their share of companies listed on the NSE rising to 11.82% from 11.58%. It was the 13th consecutive quarter of increase.

Mutual funds invested Rs 1.22 lakh crore on a net basis during the quarter, supported by continuing inflows through systematic investment plans. Investors are pumping about Rs 30,000 crore a month into SIPs, according to Haldea.

“This is a further sign of individual investors being convinced that mutual funds sahi hai,” he said.

The gap between mutual funds and FIIs narrowed by another 58 basis points during the quarter to 3.75 percentage points. The gap has more than halved in two years, from 8.09 percentage points in September 2024.

At its peak, the difference stood at 17.14 percentage points in March 2015, when FIIs held 20.70% of Indian companies and mutual funds held only 3.56%.

“MFs alone [are] set to overtake FIIs in the coming quarters,” Haldea said.

The shift reflects the growing role of domestic savings in India’s equity market. According to Haldea, “the balance of ownership continues to tilt inward,” reinforcing the market’s growing “atmanirbharta,” or self-reliance.

Domestic institutional investors as a whole also reached a record ownership level. Their share rose to 19.31% as of Sept. 30, from 19.16% three months earlier.

The increase came despite a decline in the share of insurance companies, which fell to 5.05% from 5.18%. Domestic institutional investors collectively invested Rs 1.69 lakh crore during the quarter.

Foreign investors did return as net buyers during the period, with inflows of Rs 13,970 crore. But the figure was driven by Rs 35,409 crore invested in the primary market, while foreign investors sold Rs 21,439 crore in the secondary market.

The data suggests that domestic institutions and individual investors are playing a stronger countervailing role as foreign investors reduce their influence.

The combined share of domestic institutional investors, retail investors and high-net-worth individuals reached an all-time high of 28.81% as of September.

“While FIIs continue to remain an important constituent, their stranglehold on the Indian capital market has come down,” Haldea said.

The ownership shift also extends to Life Insurance Corp. of India, the country’s largest single asset manager.

LIC’s shareholding across 273 companies where its holding was above 1% fell to an all-time low of 3.38% as of Sept. 30, from 3.50% three months earlier. This was despite LIC being a net buyer of Rs 7,346 crore during the quarter.

LIC continues to account for at least 67% of the investments held by insurance companies, with equity holdings of Rs 15.49 lakh crore. Its equity portfolio is nearly twice the size of the holdings of India’s largest mutual fund house.

The government’s shareholding as a promoter also declined to a three-year low of 8.39%, from 8.88%, after it became a net seller of Rs 38,260 crore through offers for sale in LIC, Hindustan Copper and Cochin Shipyard.

Both domestic and foreign institutions increased their allocation to consumer discretionary stocks during the quarter. For domestic institutional investors, consumer discretionary rose to 16.88% of total holdings from 16.20%. Their allocation to financial services declined to 28.37% from 28.94%.

Foreign investors also raised their allocation to consumer discretionary, to 16.25% from 15.10%, while cutting financial services exposure to 31.85% from 33.07%.

The report also identified 21 companies where promoters, FIIs and DIIs all increased their holdings during the quarter. They included Cupid, Thangamayil Jewellery, Gallantt Ispat, CCL Products, Sudarshan Chemical Industries and GMR Power & Urban Infra.