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Pritish Gandhi
Pritish Gandhi
Director - Leadership and Rewards at Khaitan & Co
Published Oct 24, 2023
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An institutional investor is a company or organization that invests money on behalf of other people.
Characteristics of Institutional Investors
The term, Elephant, refers to an Institutional Investor that has the ability to influence the market by itself because of the large quantities that it trades. Institutional investors, by their very nature, carry significant clout in financial markets. They move hefty positions, both short and long, which constitute a large portion of the transactions in exchanges. Thus, their dealings have a notable influence over the supply and demand dynamic of securities. In fact, institutional investors today make up more than 90% of all stock trading activity. As a result, they have an impact on the prices of different securities as well.
Types of Institutional Investors
Difference Between Institutional and Private / Retail Investors
Role of Institutional Investors in Corporate Governance
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Institutional investors play a significant role in corporate governance by leveraging their substantial holdings in companies to influence their behavior and decision-making. Following are some key aspects of their role:
Hence, institutional investors act as stewards of their clients' assets and have the influence to shape corporate behavior in ways that align with long-term value creation and responsible business practices.
Institutional Investors in India
Institutional Investors’ engagement has helped foster better transparency, accountability, and sustainability within the Indian corporate landscape. The following points highlight the evolving and influential role that institutional investors play in shaping corporate governance practices in India.
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