With Indian markets close to its all-time highs and the global liquidity position still not at a risk-off state, institutional investors have continued their buying spree. To see how close institutional investors have come to their limit, we looked at Nifty index. Nifty accounts for 60 per cent of the total market capitalisation in the NSE and BSE exchanges.

Our number-crunching revealed institutions now hold 70 per cent of the available free float (other than promoter's holding). Around 20 index companies have institutional holding of 80 per cent and above of their free float levels. If the market continues going up, FIIs and DIIs will find it increasingly difficult to invest in large-cap stocks until promoters dilute their stake - a strategy promoters don't like.

In another interesting observation, half of the top 10 companies with the highest institutional holding are PSUs. This may not necessarily be a vote of confidence in PSUs but rather the result of their low free float.

Institutional investors appear value conscious. The average PE ratio of top 10 Nifty companies with the highest institutional holding stands at 15.2 while that of the bottom 10 with the least holding trades at 25 times.