India Quant Strategy: What is under-appreciated? Where is investor crowding?: Asia Quantitative Strategy

Research evidence excerpt

India Quant Strategy: What is under-appreciated? Where is investor crowding?: Asia Quantitative Strategy

30 July 2026

Asia Quantitative Strategy

India Quant Strategy: What is under-appreciated? Where is

investor crowding?

In our recent report, we made a case to add more Indian equities in the wake of the Rupal Agarwal

+65 6326 7641 ongoing momentum unwind and better opportunities within India. In this report, we

rupal.agarwal@bernsteinsg.com present an update on the most institutionally crowded stocks in India and the under-

owned alpha opportunities.

Cheng Zhang, CFA, CQF

+852 2123 2636 Ownership by investor type: As of end-June, domestic institutional investors (DII) own cheng.zhang@bernsteinsg.com

18.0% of BSE 500 stocks vs. foreign institutional investors (FII) who own16.3% of top

500 stocks. In 2Q, FIIs reduced their exposure across large/mid/small-caps while DIIs

increased their ownership in mid-caps, maintained stable position in small-caps and

reduced large-cap exposure. Direct retail ownership continued to decline further in large/

mid-caps, while increased in small-caps. Retail investors remain the biggest investor class

in India small-caps, owning 14.1% vs. FIIs at 10.2% and mutual funds at 11.3%.

Sector-wise, last quarter, FIIs increased their ownership towards Energy ex. Reliance

(14% vs. 11% in Q1), while maintaining stable ownership in Real Estate, Industrial, Utilities

and Materials. Baring Health Care, Industrial, Energy ex. Reliance; FII exposure is below

10yr average across all other sectors. DIIs increased their exposure in Health Care, Material,

Real Estate, and Industrial, while cut their positions most in Consumer Staples, Tech,

Consumer Discretionary, and Financials. Retail investors increased their ownership in

Communications (9.9% vs.