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Domestic Investors Take Helm on Mumbai Stock Exchange
30 Jan
Summary
- Mutual funds now hold record 10.9% of equity value.
- Domestic investors surpassed foreign investors in March 2025.
- Retail and HNI holdings hit an all-time high of 27.8%.
Domestic institutional investors (DIIs), led by mutual funds, have become a stabilizing force in India's stock market, counteracting unpredictable foreign capital flows. During April-December 2025, foreign portfolio investors (FPIs) exhibited significant outflows and inflows influenced by global conditions. In contrast, DIIs remained consistent net buyers, reflecting a crucial shift in market dynamics.
Mutual funds have taken a leading role, with their holdings reaching a record 10.9% by value in the September 2025 quarter, fueled by steady systematic investment plan (SIP) contributions from households. This surge in domestic participation led to DII holdings surpassing FPI holdings for the first time in the March 2025 quarter.
The trend intensified in FY26. By the September 2025 quarter, DII holdings achieved an all-time high of 18.3%, while FPI holdings dropped to a 13-year low of 16.7%. The combined equity share of DIIs, retail investors, and high-net-worth individuals also reached a historic 27.8% in the same quarter.
Primary market activity remained robust. IPO volumes up to December 2025 in the current fiscal year were 20% higher than in FY25, with funds raised increasing by 10%. Mainboard IPOs saw a notable rise to 94 from 69, mobilizing ₹1,60,273 crore. SME listings also climbed to 217, raising ₹9,635 crore.
