According to a report by Motilal Oswal Financial Services (MOFSL), domestic institutional investors (DIIs) have raised their ownership of India's biggest listed companies to a record 21%, while foreign portfolio investors (FPIs) now hold 17% — down from 21.5% a decade ago. Published in MOFSL's India Strategy report, the data covers the Nifty 500 universe and follows nearly two years of sustained FPI selling.
Ownership at a glance
The latest figures mark an all-time high for DII ownership in the Nifty 500, the report said. DIIs further strengthened their hold on Indian equities, with ownership rising to 21%, while FPI ownership declined to 17%. Over the past one year, DII ownership rose 1.6 percentage points and FPI ownership dipped 1.9 percentage points, according to MOFSL.
| Metric | Value |
|---|---|
| DII ownership in Nifty 500 | 21% (all-time high) |
| FPI ownership in Nifty 500 | 17% |
| FPI ownership a decade ago | 21.5% |
| DII ownership change (past year) | +1.6 percentage points |
| FPI ownership change (past year) | -1.9 percentage points |
| Domestic fund net inflows (22 months) | ~$166 billion |
| FPI net outflows (22 months) | $58 billion |
| Average monthly SIP inflows | ~$3 billion |
Fund flows: domestic money absorbs FPI selling
To offset $58 billion of net selling by FPIs over the past 22 months, domestic funds net infused about $166 billion into Indian stocks, according to MOFSL. Sustained domestic inflows have comfortably absorbed the cumulative FPI outflows during that period, the report said.
DIIs — especially mutual funds flush with cash through systematic investment plans (SIPs) — absorbed the selling and provided stability to leading domestic indices, the report noted. SIP inflows averaged around $3 billion per month over the period.
The report highlighted the consistency of the trend:
This marks the ninth consecutive quarter of rising DII ownership, highlighting the growing role of domestic investors in India's equity markets.
Structural shift since 2021
MOFSL described the change as a structural shift in institutional ownership that has gained momentum since 2021 and continues to strengthen as DII holdings scale new peaks. The continuous selling of Indian stocks by FPIs for nearly two years has impacted the ownership structure for that group of investors, while domestic funds have taken a larger share of India Inc's biggest companies.
The report's findings point to domestic investors consolidating their position as the dominant institutional force in Indian equities. Foreign funds now hold a smaller share than at any point in the past decade — 17% versus 21.5% a decade ago — even as domestic ownership reaches new records.
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