India’s investor base is changing. Is your IR programme keeping up?

Insights · Swati Chauhan, Founder, Vaydha

A listed company can meet its disclosure obligations and still be difficult for a prospective investor to evaluate.

The quarterly results are available. The presentation is on the website. An earnings call may have taken place. Yet someone assessing the business for the first time may struggle to connect its operating performance with its cash requirements and capital allocation.

For a CFO, that raises a question: does the investor relations programme help investors understand the business, or does it mainly distribute information?

The changing composition of India’s equity market gives management teams a reason to revisit that question.

NSE’s August 2026 Market Pulse reported that foreign portfolio investors held 15.1% of the market capitalisation of NSE-listed companies at the end of June. Domestic institutional investors held 19.5%, exceeding foreign ownership for the seventh consecutive quarter. Average monthly SIP contributions during April–June were ₹31,283 crore, up 16.5% year on year.

These figures establish the growing importance of domestic participation. They do not establish how much of that capital will reach smaller companies. For management, the practical implication is to reassess which institutions could invest in the business and whether its public information gives them a usable basis for doing so.

An investor base is unlikely to broaden through an engagement programme confined to familiar shareholders.

Start with investors who could realistically invest

Domestic investors may find it easier to meet management and visit facilities. But proximity is only useful when the company fits their investment requirements.

Fund mandates, position sizes, trading liquidity, governance and valuation all influence that fit. A growing domestic capital pool does not remove these constraints.

The first task is therefore to identify suitable investors. Has the target list been reviewed as the business has grown or changed? Does it include institutions whose sector interests and investment approach match the company? Is management spending time on funds that could realistically take a position?

A long contact list provides few answers to these questions.

Once suitable investors have been identified, management needs to consider what they will find when they begin their research.

Make the business easier to assess

Consider an illustrative manufacturer reporting healthy revenue growth. An investor will want to understand how much came from volumes, pricing or product mix. If the company is expanding capacity, the questions extend to utilisation, incremental capital employed, working capital and the timing of cash generation.

Without those explanations, it is difficult to distinguish growth that generates cash from growth that absorbs it. The company may have a sound investment case, but its presentation has not supplied enough information to assess that case.

This is where the CFO’s contribution to investor relations becomes essential.

Operating measures need consistent definitions across reporting periods. Changes in segment reporting need reconciliation. One-off items need explanation. Capital expenditure announcements need context about funding, execution and expected returns.

These details help an investor connect strategy with financial outcomes. They also allow investors to test management’s assumptions and assess the risks.

The objective is not to eliminate questions before a meeting. It is to ensure that the discussion can begin with the business and its prospects, rather than with avoidable uncertainty about the numbers.

Diagnose what is limiting interest

Limited institutional ownership or analyst coverage can prompt management to seek more meetings. Before doing so, it should establish what is limiting interest.

If investors struggle to understand the economics of the business, better public information may help. If the constraint is liquidity, valuation or a mismatch with fund mandates, more outreach alone is unlikely to resolve it.

Research by Brian Bushee and Gregory Miller found improvements in institutional ownership, analyst following and visibility among smaller US companies that engaged IR firms, relative to matched companies. That evidence supports taking IR seriously. It does not predict the outcome for an individual Indian company or justify promising a particular re-rating.

Management needs to distinguish problems that better investor engagement can address from those requiring changes in the business itself.

Domestic participation gives smaller listed companies a reason to review their approach to investors. The opportunity will depend on the business, the investors it suits and the quality of the information available to assess it.

For the CFO, the test is straightforward: can a suitable new investor use the company’s disclosures to form a considered investment view?

Counting presentations and meetings will not answer that question.