Mumbai, February 9: A new report reveals that domestic institutional investors (DIIs) have overtaken foreign institutional investors (FIIs) for the first time in the Nifty50 index.
According to data from Motilal Oswal Securities, DIIs held approximately 24.8% of the Nifty50 index by the end of the December 2025 quarter, while FIIs accounted for about 24.3%.
Analysts indicate that FII holdings have reached their lowest level in the past eight quarters, whereas domestic capital investments have strengthened. They believe this shift is not temporary but rather structural and long-term.
Previously, domestic investors had surpassed foreign investors in the overall equity market, but they lagged in major indices like Nifty50 until this quarter.
Market experts attribute the rapid growth in domestic investment to a projected SIP investment of ₹3.34 lakh crore in 2025, increased participation from pension funds, and the entry of new asset management companies.
Additionally, investments from the Employees’ Provident Fund Organization (EPFO) and insurance companies have bolstered domestic institutional investment. Experts suggest that while this trend may weaken during market downturns, it is unlikely to reverse.
Over the past five years, the market has generated good returns due to domestic investors, while foreign investors have sold off approximately ₹9.96 lakh crore during the same period.
Brokerage data indicates that FII holdings in Nifty50 decreased by 90 basis points year-on-year and by 20 basis points quarter-on-quarter. In contrast, DII holdings increased by 170 basis points annually and by 30 basis points on a quarterly basis.
In this quarter, foreign investors reduced their stakes in about 78% of Nifty50 companies, while domestic investors increased their investments in roughly 82% of these companies.
In terms of value, domestic institutional investors’ total assets reached around $24.8 billion, surpassing the $24.3 billion held by foreign investors.
In 2025, domestic investors made substantial investments totaling ₹7.44 lakh crore, while foreign investors sold off ₹1.66 lakh crore. Despite this, the Nifty only yielded a 10% return.
A recent report highlighted that weak corporate earnings and high stock prices were significant factors for this performance. However, positive elements like the India-U.S. trade deal could reverse sentiment and attract foreign investors back.
–
DBP/
My name is Narendra Jijhontiya. I am an experienced content writer with several years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including TECHNOLOGY, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.
Leave a Comment