Priyanka Tiwari
Share
Suspense crime, Digital Desk : For the first time ever, domestic institutional investors (DIIs) surpassed foreign institutional investors (FIIs) in the ownership of Indian equities. This change indicates an ongoing selling by FIIs due, in large, to global economic and market uncertainties.
As of end of the March 2025 quarter, the stock ownership by DIIs was approximately 16.91% while that for FIIs was 16.84%, marking the lowest FII holdings in the past 50 quarters according to ACE Equities data. Currently, DIIs manage assets of nearly Rs 69.80 lakh crore while FIIs manage Rs 69.58 lakh crore.
The change in investments stem from a boost to domestic investments which began from the late September 2024 period. During this period, DIIs cumulatively invested over Rs 3.97 lakh crores while FIIs pulled out close to Rs 2.06 lakh crores as per NSE and NSDL data.
This shift has been labeled as a structural change by the Head of Research at Asit C. Mehta Investment Intermediates, Siddharth Bhamre. He added that FIIs are constant net sellers throughout the year while domestic flows, especially retail through mutual fund SIPs, had remained strong. This is likely to reduce volatility, he pointed out, since domestic capital is generally far more stable than foreign investments.
The phenomenon of rising internal participation is not a novel issue. For the last two years, domestic institutional investors (DIIs) have been consistently ahead of foreign institutional investors (FIIs) regarding net investments:
In 2021, domestic investors had an outlay of ₹98,000 crore while foreign investors had an inflow of ₹26,000 crore.
In 2022, domestic investors had an outlay of ₹2.76 lakh crore while foreign investors had an outflow of ₹1.28 lakh crore.
In 2023, both sides were nearly balanced—DIIs spending ₹1.81 lakh crore and FIIs spending ₹1.74 lakh crore.
In 2024, domestic investors had an outlay of ₹5.23 lakh crore whereas foreign investors had an outflow of ₹8,000 crore.
So far in 2025, domestic investors spent ₹2.1 lakh crore while foreign investors withdrew ₹1.07 lakh crore.
As per Dhananjay Sinha, Co-head of Equity & Research at Systematix Group, the last few years have seen foreign investments as quite volatile and subject to sharp outflows. At the same time, there has been steady retail participation through systematic investment plans (SIPs) and the like. Still, foreign investors remain important participants in the markets, but their sales are without a doubt in a falling market, reaffirming the reliance from domestic investors.
--Advertisement--
