Capital market in India got a desi boost as the share of Domestic Institutional Investors (DIIs) reached an all time high but also surpassed Foreign Institutional Investors (FIIs), as per the data from primeinfobase.com. Expectation is that this trend will grow further.
According to the data released on Friday, the share of DIIs rose to 17.62 per cent as on March 31, 2025, up from 16.89 per cent as on December 31, 2024. In contrast, share of FIIs came down to 17.22 per cent, from 17.24 per cent over the same period.
Pranav Haldea, Managing Director, PRIME Database Group, noted that the domestic Mutual Funds (MFs), flush with retail money coming through SIPs, have continued to play a huge role in this with a net investment of ₹1.16 lakh crore during the quarter, taking their share in NSE-listed companies to yet another all-time high of 10.35 per cent as on March 31, 2025— the first time reaching double digits (up from 9.93 per cent).
Sector-wise, DIIs increased their allocation most to financial services, from 25.86 per cent of their total holding as on December 31, 2024 to 27.5 per cent of their total holding as on March 31, 2025. Meanwhile, they decreased their allocation most to information technology (10.32 per cent to 9.11 per cent). FIIs too increased their allocation most to financial services (28.53 per cent to 30.87 per cent) while they decreased their allocation most to consumer discretionary (17.51 per cent to 15.80 per cent).
Life Insurance Corporation of India (LIC), India’s largest institutional investor, saw its share (across 282 companies where its holding is more than 1 per cent) increasing to 3.72 per cent as on March 31, 2025 from 3.51 per cent as on December 31, 2024, with a net buy of over ₹34,000 crore — its highest in 5 years.
With a net outflow of over ₹1.16 lakh crore (outflow of around ₹1.29 lakh crore in secondary market and inflow of over ₹13 lakh crore in primary market) due to rising yields and stronger dollar in US, the share of FIIs slumped further to a 12 year low of 17.22 per cent from 17.24 per cent during the quarter.
“Indian markets shall continue their steadfastly march towards even more atmanirbharta (self-reliance) in the quarters and years to follow, with the day not too far when the share of MFs alone shall overtake that of FIIs,” Haldea said.
For years, FIIs have been the largest non-promoter shareholder category in the Indian market with their investment decisions having a huge bearing on the overall direction of the market. This is no longer the case.
“DIIs along with retail (individuals with up to ₹2 lakh shareholding in a company) & High Net Worth Individuals (HNIs) (more than ₹2 lakh) investors have now been playing a strong countervailing role with their share reaching an all-time high of 27.10 per cent as on March 31, 2025. While FIIs continue to remain an important constituent, their stranglehold on the Indian capital market has come down,” Haldea said.
According to him, this completes a structural shift which has taken place in the Indian market over the last 10 years. To put this in perspective, as on March 31, 2015, while the FII share was 20.71 per cent, the combined share of DII, retail and HNI was just 18.47 per cent.