In a historic milestone for Indian financial markets, Domestic Institutional Investors (DIIs) have, for the first time, surpassed Foreign Institutional Investors (FIIs) in terms of equity holdings. This significant shift marks a growing influence of domestic players in the Indian stock market, reshaping the traditional balance of power.
DIIs Take the Lead in Market Holdings
As of the March 2025 quarter, DIIs now hold approximately 16.91% of Indian equities, slightly ahead of FIIs, whose stake has dipped to 16.84%. This is not just a symbolic crossover but a 50-quarter low for FIIs, highlighting the depth of the ongoing shift in investor dynamics.
Assets Under Custody Reflect Changing Trends
The data also reveals that DIIs have assets under custody amounting to Rs 69.80 lakh crore, compared to Rs 69.58 lakh crore held by FIIs. This development reinforces the strength and commitment of domestic investors, even in the face of global economic uncertainties.
This is the first time in history that domestic institutions hold a larger share of the Indian stock market than their foreign counterparts.
What Triggered This Shift?
This turning point comes after a strong phase of domestic buying that began in late September 2024. During this period:
DIIs invested over Rs 3.97 lakh crore, showing robust confidence in India’s growth story.
On the flip side, FIIs sold more than Rs 2.06 lakh crore, likely reacting to global trade tensions, geopolitical risks, and market volatility.
The consistent outflow from foreign investors, coupled with strong domestic inflows, has tilted the scales for the first time in favor of Indian institutional investors.
A New Era in Indian Markets
This development is not just about numbers—it reflects a growing maturity and resilience in India’s domestic investor base. With Indian institutions gaining more control, market movements may now be more aligned with local economic fundamentals than external sentiments.
In conclusion, the Indian equity market has entered a new phase where domestic institutional investors have taken the lead over foreign counterparts. This could potentially bring more stability and confidence to long-term investors, as the influence of domestic money grows stronger in shaping market trends.
