Shareholding pattern

The quarterly disclosure of who owns a listed Indian company, split into promoter and public, with the public block broken down by institution and category.

A typical pattern might show 74.2% promoter, 12.1% foreign portfolio investors, 8.4% domestic institutions and 5.3% retail.

You can read it in two minutes, and it answers several questions at once. How much stock actually trades. Whether professional investors have done the work and stayed. Whether the promoter has been buying or selling. And, in the accompanying detail, how much of the promoter's holding is pledged.

Read eight quarters in sequence, never one alone. A promoter stake falling quarter after quarter is a fact that no investor presentation will mention.

It takes two minutes once a quarter and answers four questions.

Give the institutional block a second look. Foreign portfolio investors and domestic institutions behave differently in a fall: the first sell for reasons that have nothing to do with the company, the second have been buying steadily out of monthly retail inflows. A company where foreign holding has fallen from 18% to 6% over two years while domestic holding rose has had its register turned over, and the price during that period was a record of the transfer. It told you nothing about the business. Knowing that changes how much information you take from the chart.