Offers for sale by private equity (P/E) and venture capital (VC) firms have been significantly higher than fresh issuances of capital between 2018 and 2023. Sales by PEs and VCs amounted to around $26 billion compared with about $10.4 bn worth of capital issuances, according to an analysis by Kotak Institutional Equities (KIE). In 2023 so far, PEs and VCs have sold stock worth more than Rs 25,000 crore.
Moreover, sales of their holdings by promoters at Rs 87,000 crore or about $10 bn, has been the highest in the past six years. Of this the promoters of the Adani Group sold shares worth Rs 37,000 crore or about 40% of the total promoter selling in 2023.
As a result of promoter sell-downs, the promoter holding in the BSE-200 Index has fallen to 48.8% in the June quarter (for which the data is available) from 50.3% in the December, 2022 quarter. The combined holding of domestic investors (Mutual Funds, local institutions and retail investors) has increased by 90 basis points to 23.5% at the end of the June quarter. The holding of Foreign Portfolio Investors has increased by a modest 26 bps to 21.7% over the same period, while the holding of others (AIFs, PMS fall under this category) has increased 31 bps to 6%.