sharma23yash-oss Shareholding Pattern Analysis (India)
Filed quarterly under SEBI LODR Regulation 31, within 21 days of quarter end. It is the most under-read high-signal document in Indian markets: it shows what owners did, not what management said.
The structure
| Category | What it contains |
|---|---|
| (A) Promoter and Promoter Group | Indian and foreign promoters, promoter-group bodies corporate, trusts |
| (B) Public | Institutions and non-institutions |
| — Institutions | Mutual funds, AIFs, banks, insurance companies, FPIs, NBFCs, pension funds |
| — Non-institutions | Individuals (split at ₹2 lakh nominal share capital), NBFCs, trusts, NRIs, bodies corporate |
| (C) Non-Promoter Non-Public | Shares held by employee trusts, ESOP trusts, depository receipts |
Plus mandatory annexures: shares pledged or otherwise encumbered, shares in dematerialised form, and a list of shareholders holding more than 1%.
What to build
Track at least 8 quarters:
| Quarter | Promoter % | Pledge % of promoter | FPI % | MF % | Insurance % | Retail % | # of retail holders |
Derive:
Free float % = 100 − promoter % − non-promoter non-public %
Free float market cap = market cap × free float %
Institutional % = MF + FPI + insurance + banks + AIF + pension
Pledge (as % of total equity) = promoter % × pledge % of promoter holding
The signals, ranked
1. Promoter stake change
- Promoter selling into strength while guiding for growth is the single most reliable negative signal in Indian mid-caps. Check whether the sale was disclosed as a bulk/block deal or crept down 0.3% at a time.
- Creeping acquisition — under SAST Regulations a promoter above 25% can acquire up to 5% per financial year without triggering an open offer. Steady buying inside that limit is a genuine positive.
- A fall of exactly the pledge amount usually means invocation, not a sale. Cross-check the encumbrance annexure and the Reg 31(1) pledge disclosure.
- Promoter % can also fall from dilution (QIP, preferential issue, ESOP exercise, conversion of warrants) without any promoter selling a share. Always reconcile against share count, not just percentage.
2. Pledge
Pledge % of promoter holding Reading
0 Clean
1–10% Monitor
10–25% Material; understand the borrowing
25–50% Structural risk; model an invocation scenario
>50% Treat the equity as an option on promoter solvency
A pledge increase in a falling market is a margin call in progress. Also look for "otherwise encumbered" — non-disposal undertakings and negative liens are disclosed separately and are economically similar.
3. Institutional flows
- Mutual fund entry is a quality filter: Indian AMCs run internal governance screens and take positions slowly. First-time MF entry into a small-cap is meaningful.
- MF exit across multiple houses in one quarter is a stronger signal than any single fund's move.
- FPI % — separate long-only from ETF/index flows. An index inclusion event (MSCI, FTSE, Nifty rebalancing) mechanically moves FPI % without any view being expressed.
- Insurance company entry (LIC in particular) is slow, valuation-sensitive money and rarely a momentum signal.
4. Retail behaviour
The number of individual shareholders holding up to ₹2 lakh nominal capital is disclosed. Read it as sentiment:
- Retail count exploding while institutions exit = distribution
- Retail count falling while MFs accumulate = accumulation
- Retail count is also the base for SEBI's minimum-public-shareholding and small-shareholder-director provisions
5. Structural constraints
- Minimum public shareholding: 25% for most listed companies. A promoter at 74–75% has no headroom to buy. A company below MPS is under a compliance clock and will dilute.
- Free float and index eligibility: index inclusion depends on free-float market cap. A promoter reducing stake can be preparing for index inclusion — a mechanical buyer.
- Concentration: the >1% shareholder list shows how few holders control the float. A thin float amplifies both directions and makes exit costly.
Cross-checks
Pair every shareholding-pattern conclusion with:
- Bulk and block deal data from NSE/BSE for the quarter — names the counterparty
- SAST disclosures (Reg 29) for acquisitions crossing 5% and every subsequent 2%
- PIT disclosures (Reg 7) for insider trades above ₹10 lakh in a calendar quarter
- AMFI monthly portfolio disclosures for exact mutual fund positions, which are more granular and more current than the quarterly SHP
Output format
# <Company> — Ownership, <period>
## Trend
| Qtr | Promoter | Pledge (of prom.) | FPI | MF | Ins. | Retail | Retail holders |
## What changed and why
- Promoter: <Δ, and reconciled to share count>
- Pledge: <Δ and interpretation>
- Institutions: <who came in, who left — named where disclosed>
## Structural
- Free float: X% (₹Y cr)
- MPS headroom: ...
- Top holders >1%: ...
## Read
<2–4 sentences: what owners did, and whether it agrees with management's story>
Hard rules
- Reconcile percentages to absolute share counts before calling anything a sale. Dilution moves percentages without trades.
- Name the quarter and the filing date for every figure.
- Do not infer intent. "Promoter holding fell 2.1% via a block deal on " is a fact; "promoters are losing confidence" is not.
- Encumbrance disclosures cover pledges and other encumbrances — read both lines.