Falling for the fourth quarter in a row, foreign institutional investors' (FII) holding in Indian companies dropped to 15.5 per cent in the three months ended December to its lowest level in five years, a report says.

FII ownership in publicly listed companies has fallen to a bare 15.5 per cent, down 1.42 per cent in October-December 2008 quarter, which is the same level as of December 2003, a report by the global financial major Citigroup's research arm stated.

"It is no surprise that foreigners own less of India Inc after Oct-Dec 2008...Just as in each of the previous three quarters," Citigroup global markets India analysts Aditya Narain and Tirthankar Patnaik said in the report.

FII portfolio (including financial institutions, American and global depository receipts) now stands at $94 billion, down 33.5 per cent since September 2008.

FIIs have sold as much as $3.3 billion in the quarter ended December 2008, while they offloaded $13.13 billion (Rs 52,987.10 crore) in the entire calender year 2008.

Interestingly, foreign investors remain the top non- promoter stakeholders in the Indian market, despite their declining share in the last four quarters, the Citi report added.

In a significant shift, domestic institutional investors, which include mutual funds and insurance companies, now own more than retail investors in the public-listed companies.

"The big gainers continue to be insurance companies... they now own five per cent of India Inc, though recent growth pangs could moderate the pace of India Inc's acquisition spree," the Citi report added.

Meanwhile, the domestic investors excluding promoters now collectively own more than foreigners for the first time in four years.

Further, according to the ownership patterns, FIIs own a larger share of the top 30 companies than the top 500 firms.

FIIs own 22.49 per cent stake in the 30 bluechip firms, which constitute the benchmark index Sensex, while promoters and government have 52.83 per cent holding in these companies. Foreign investors own 18.15 per cent in BSE 500 index firms.

Promoter ownership has jumped sharply in the BSE 500 companies and it is believed that promoters have been buying into their falling stock prices, the report added.

Further, insurance, mutual funds, banks and others own a combined 11.73 per cent, while retail investors own about 8.63 per cent in the Sensex companies.

The Citi report revealed that retail investors continue to exit and their ownership in BSE 500 companies is now about half of that at the start of the last bull market.