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 Large shareholders in Indian firms have sold 1.03 trillion rupees ($12.36 billion) in shares so far this year, double that of in 2022, as an ongoing rally in the domestic equity markets help them offload shares at the fastest pace on record.

These shareholders, called "promoters" by the country's markets regulator, control a company's decision making. They sold 437 billion rupees in shares last year, data from information provider Prime Database shows.

Private equity and venture capital firms have sold nearly 498 billion rupees this year, matching the speed of exits in the previous year, the data showed.

Prime Database's numbers reflect large sales of greater than 0.5% of total shares of a company or 100 million rupees, categorised as 'bulk' and 'block' deals on exchanges.

India's bluechip Nifty50 index has risen almost 12% so far this year. Of the 50 index stocks, 26 are trading at record highs, with 15 of them hitting those levels in November, data compiled by Reuters shows.

"I see a baseline of $2.5-3 billion in such sales on a steady state basis, which will grow over time as more companies get listed and more free float (of shares) gets created," said Subhrajit Roy, head of global capital markets for India at Bank of America.

"Most of the monetisation seen this year has been by financial investors, including foreign shareholders, and promoters," he said.

Big sellers last month included Alipay, which sold stake in India's Zomato for nearly $400 million, and Berkshire Hathaway, which exited its invested in payments firm One 97 Communications which runs the Paytm brand in a $165 million deal.

"Most of the trades have been reasonably well placed," said Roy, with a mix of local and foreign investors buying.

In the past, heavy selling by large shareholders has signalled a peak for stocks but large domestic flows have absorbed the effects.

"We have a huge inflow of systematic investment plan (SIP) money every month which is finding its way into quality companies," said Nirav Gandhi managing director and co-head of investment advisory and distribution at JM Financial, a domestic investment bank.

IPO RUSH

The bouyant market has also prompted a steady stream of initial public offerings, with recent listings like Tata Technologies and government-owned IREDA soaring on debut.

"The market has a big appetite for good paper and if the company fulfills all the tick boxes, investors will lap it up, Gandhi said.

Firms have raised 570.47 billion rupees from public offerings, including IPOs, follow-on offers and offer for sales, according to Prime database.

"This year's activity has created a nice base for next year," said Bank of America's Roy. "With Indian macros being strong and a good after market performance of recent transactions there will be a good pipeline of transactions next year."

($1 = 83.3425 Indian rupees)