Domestic Investors Hit Record 17% Equity Share in India
By Market Desk
Domestic institutional investors reach an all-time high of 17% equity share in India by March 2026, as FPIs exit to a 15-year low. Explore the market shift.
Domestic institutional investors (DIIs) significantly increased their presence in Indian equities, securing an all-time high share of 17% by March 2026. This notable shift occurred as foreign portfolio investors (FPIs) simultaneously reduced their stake to a 15-year low of 15.8%, according to SEBI’s Annual Report 2025-26.
Understanding the Shift in Capital Flows
The divergence in investment patterns reflects global uncertainties that prompted FPIs to withdraw funds from India. In contrast, DIIs maintained consistent investment flows, providing crucial stability to the Indian capital markets during a volatile period.
Key Contributions from Domestic Investors
Domestic institutional investors, encompassing banks, development financial institutions, insurance companies, mutual funds, and the National Pension System, played a pivotal role in this financial landscape. Their collective net investment during 2025-26 was substantial.
- DIIs invested a net of Rs 8.5 lakh crore during 2025-26.
- Mutual fund SIPs were a primary driver of this inflow, acting as a counterbalancing force against foreign divestments.
The Rise of Domestic Savings
The SEBI report underscored the growing influence of domestic savings within India’s capital markets. This trend is evident in the expansion of systematic investment plan (SIP) accounts and the increasing average monthly investments.
- SIP accounts grew by 3.9%, reaching 10.45 crore in FY26.
- Average net monthly SIP investments rose by 25.8% to Rs 16,413 crore.
Market Resilience Amidst Volatility
Despite a year marked by geopolitical tensions and rising US bond yields, which led to a correction after the Nifty 50 reached a record high, India maintained its economic position. The robust domestic buying helped stabilize the markets.
By the end of FY26, India solidified its standing as the world’s 5th-largest stock market, boasting a total market capitalization of Rs 411.6 lakh crore. This demonstrates the increasing strength and self-reliance of India’s financial ecosystem, driven by its domestic investor base.