Share of Domestic Institutions in Nifty-50 Ownership Exceeds FIIs for First Time
•February 9, 2026
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Companies Mentioned
Why It Matters
The dominance of domestic capital provides a more stable, long‑term liquidity source, reducing the market’s vulnerability to foreign‑flow volatility. It signals a structural realignment of Indian equity financing toward home‑grown investors.
Key Takeaways
- •DIIs hold 24.8% of Nifty‑50, surpassing FIIs
- •FIIs fell to 13‑year low of 16.6% in Nifty‑500
- •Mutual fund ownership rose to 11.1% of listed firms
- •DII inflows totalled $90.1 bn in calendar year 2025
- •Retail and HNI investors now hold 28% of equities
Pulse Analysis
The December 2025 ownership data released by Motilal Oswal marks a watershed moment for Indian equities: domestic institutional investors (DIIs) now own 24.8 percent of the Nifty‑50, edging out foreign institutional investors (FIIs) for the first time. Over the past year DIIs expanded their stakes across most index constituents while FIIs trimmed exposure amid heightened global uncertainty. This reversal mirrors a broader trend of capital localisation, driven by robust systematic investment plan (SIP) inflows into domestic mutual funds that pumped $90.1 billion into the market in 2025.
The ascendancy of DIIs reshapes the liquidity profile of India’s stock market. Unlike volatile foreign capital, domestic money tends to be longer‑term and less sensitive to geopolitical shocks, offering a stabilising buffer during risk‑off episodes. Consequently, market volatility may moderate, and pricing efficiency could improve as domestic investors increasingly influence price discovery. For policymakers, the reduced reliance on FIIs eases balance‑of‑payments pressures, while corporate issuers may find a steadier base of equity financing, especially in sectors where DIIs have amplified exposure such as technology and healthcare.
Mutual funds are the engine behind the DII surge, closing the gap with foreign investors to 5.5 percentage points of listed‑company ownership. Retail participation, reflected in rising SIP contributions, has also hit an all‑time high, pushing combined domestic ownership to 28 percent. This structural shift suggests that future market dynamics will be shaped more by domestic savings behaviour than by external capital flows. Investors should therefore monitor DII allocation trends, sectoral rebalancing, and the evolving regulatory environment as they recalibrate strategies for a market increasingly anchored by home‑grown capital.
Share of domestic institutions in Nifty-50 ownership exceeds FIIs for first time
Share of domestic institutions in Nifty‑50 ownership exceeds FIIs for first time
DIIs held a 24.8 % share in Nifty‑50 ownership, compared with 24.3 % held by FIIs as of December 2025
Updated – February 09, 2026 at 10:03 PM
The share of domestic institutional investors (DIIs) in the ownership of Nifty‑50 companies has exceeded that of foreign institutional investors (FIIs) for the first time in the December quarter, while continuing the dominance in the Nifty 500 companies for the seventh consecutive quarter.
DIIs held a 24.8 per cent share in Nifty‑50 ownership, compared with 24.3 per cent held by FIIs as of December 2025, according to an ownership analysis by Motilal Oswal Financial Services. Over the past year, DIIs have increased their shareholding in a majority of index constituents, while FIIs have pared exposure amid global macro uncertainty.
Meanwhile, DIIs have consolidated their position as the dominant force in Indian equities, with their holdings in Nifty‑500 companies rising to an all‑time high of 20.6 per cent in December 2025, widening their lead over FIIs, whose stake stood at 18.4 per cent.
The gap between FII and DII ownership has narrowed to just 90 basis points, a significant shift from December 2015 when FIIs held 21.5 per cent compared to DIIs’ 12.1 per cent. DIIs pumped in $23.4 billion during the December quarter and $90.1 billion through calendar year 2025, primarily driven by steady systematic investment plan inflows into domestic mutual funds.
“DIIs holding a larger share than FIIs in the Nifty50 underscores a fundamental shift toward stronger domestic participation in India’s equity markets,” said Himanshu Srivastava, Principal, Manager Research at Morningstar Investment Research India. “The increasing dominance of domestic money provides a more stable, long‑term source of liquidity, reduces reliance on volatile foreign flows, and could help cushion markets during global risk‑off phases.”
MFs close gap with FIIs
Mutual funds, in particular, have been closing the gap with foreign investors at a faster pace. According to data from primeinfobase.com, the difference between FII and mutual‑fund shareholding in NSE‑listed companies narrowed to 5.50 per cent as of December 31, 2025, from 10.51 per cent three years ago. Mutual funds held 11.10 per cent of listed companies at the end of December, up from 10.94 per cent in September, marking the tenth consecutive quarter of increase.
FII holdings, meanwhile, declined to a 13‑year low of 16.60 per cent, as foreign investors pulled out ₹11,765 crore during the quarter, even as they invested ₹30,325 crore in primary markets. On a year‑on‑year basis, FIIs reduced their stakes across 15 of the 24 sectors within the Nifty‑500, with the largest cuts in electronics manufacturing services, consumer durables, technology, infrastructure and retail.
“For years, FIIs have been the largest non‑promoter shareholder category in the Indian market. This is no longer the case,” said Pranav Haldea, Managing Director of PRIME Database Group. “DIIs, along with retail investors and high‑net‑worth individuals, have played a strong countervailing role, with their combined share reaching an all‑time high of 28 per cent as of December 31, 2025.”
Promoter holdings declined to an all‑time low of 48.8 per cent, down 90 basis points year‑over‑year, as buoyant primary and secondary markets provided opportunities for stake dilution. Retail investor holdings also moderated to 12.1 per cent, down 60 basis points from the previous year.
“…this milestone reflects the coming of age of the retail investor, whose patient, long‑term capital is increasingly strengthening domestic markets. The fact that monthly SIP flows have continued to rise even through a phase of relatively muted returns underscores both growing maturity and the ongoing financialisation of household savings. This trend appears structural and should anchor the Indian markets domestically,” said Varun Gupta, CEO of Groww Mutual Fund.
Sectoral allocation patterns showed both DIIs and FIIs increasing their exposure to financial services, which now accounts for 28.34 per cent of DII holdings and 31.85 per cent of FII holdings. DIIs raised stakes in 22 out of 24 sectors on a year‑over‑year basis, with the maximum increases in electronics manufacturing services, technology, telecom, retail, PSU banks, and healthcare sectors.
Published on February 9, 2026
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