I think we can calculate trading float / floatable number of shares. If you take average of trading shares and divide it by total share capital minus share of promoters and institutional investors, you may get some proxy for your variable.

As example, to determine the free float for the weighting of stocks contained in an index the following definition may be used which gives an indication what can be considered as free float: All shares (including employee stock option plans and own shares) that amount to at least 4 per cent [to be defined based on market place] of the share capital shall be considered block ownership. Free float shall be defined as all shares – as long as the share does not exceed 25 per cent of the share capital – that are held by investment funds, pension funds or investment management companies as long as these do not have the features of a special fund or imply a long-term investment strategy (for strategic goals, to influence company policy or business activities).

Thank You Gentlemen

@Ramesh: Appreciate your perspective on smoothing the daily volumes for past N days. 

Also, thanks for your "Adjusted Free Float" definition.

@Hannes: Appreciae your inputs. 

Question: Your last statement " as long as these do not have the features of a special fund or imply a long-term investment strategy "

Though such goals are documented and publically accessible, but still how do we even know what is their views on liquidating a particular stock? It would not be easy and rather add more exposure to the model of sensitive assumptions.

If we take a conservative assumption that all non-promoter Institutional holding is on account of strategic goals, then all we need to do is to keep an eye on Institutional Buying/ selling. Which are documented and published by exchanges anyway. So, we just need to adjust such transaction from out denominator (floatable shares) as a maintenance.