Market Volatility Hits HUFs, Brokers & Institutions Harder Than FIIs:

While institutional foreign investors (FIIs) are undergoing a selling binge and have observed a drop in their assets under custody (AUC) due to the correction in the Indian markets, other institutions and investor types have suffered even greater losses in terms of portfolio value.

Some of these are Hindu Undivided Families (HUFs), brokers, partnership firms, Foreign Currency Convertible Bond (FCCB) holders, and other financial institutions.

HUFs experienced the largest drop since September, with their equity value plunging by more than 87 percent from their September peak. This was followed by brokers and partnership who suffered near 85 percent and around 27 percent declines, respectively. FCCB holders and other financial institutions also suffered major losses to their equity accounts to the tune of 26.5 percent and 23 percent, respectively.

Even though FIIs lost nearly 20 percent of their AUC in equities since September, which on the whole is an AUC decline for them, it is still sizeable. By percentage loss FIIs place 6th for loss of asset value.

The Indian market has seen foreign investors parting with over Rs 2.5 lakh crore since the begining of September. This figures stems from worries surrounding exhorbitant valuations, a stagnant economy, and growing global tariff conflicts. So far, the sensex and nifty have dropped by approximately 4.5% each this year, while BSE Midcap and Smallcap have faced a Decrease of over 14% and 17% respectively.

In addition, banks, mutual funds, trusts, insurance companies, and other institutions have seen their annual average AUC estimate in equity fall by 11-16 percent. Local default pension funds, foreign depositories and portfolio mmanagers, along with corporates and alternate investment funds, experienced a greater dip with equity holding erosion ranging between 2 to 10 percent.

Although the market displays a broad correction trend, foreign direct investment (FDI) equity pots increased by an estimated 3.3 percent in addition to Non Resident Indian and Foreign Venture Capital investments, estimated to increase by 2.6 percent and 1.1 percent respectively.