DII Holding In Indian Stock Market Surpasses FPIs

The share of Domestic Institutional Investors (DIIs) in the Indian capital market reached an all-time high of 17.62% as on March 31, 2025, up from 16.89% as on December 31, 2024, following a net investment of a staggering Rs 1.89 lakh crore during the quarter ending March 2025, and surpassed Foreign Institutional Investors (FIIs) share of 17.22%. It is a landmark moment for the Indian capital market. Let us look at the details and what it means for the market and investors.

The Domestic Numbers - Inflow

The mutual funds backed with retail money coming through Systematic Investment Plan (SIPs), have continued to play a significant role in this with a net investment of Rs 1.16 lakh crore during the quarter, taking their share in companies listed on NSE to yet another all-time high, and the first time in double digits, of 10.35% as on March 31, 2025 (up from 9.93%). The domestic insurance companies were also not behind with a net buy of Rs 47,538 crore during the quarter. The party was joined by AIFs and PMS as they net bought Rs 3,885 crore and Rs 1,137 crore during the quarter, respectively, while Banks net sold Rs 1,345 crore.

The Domestic Numbers - Outflow

If we look at net outflow, the value stands at Rs 1,16,574 crore (Outflow of Rs 1,29,680 in the secondary market and inflow of Rs 13,107 crore in the primary market). The net outflow was mainly driven by rising yields and a stronger dollar in the US. The share of FIIs slumped further to a 12-year low of 17.22% from 17.24% during the quarter.

Absolute Numbers of DII and FII Holdings

DII holding of Rs 71.76 lakh crore is now 2% higher than FII holding. Following this, the FII to DII ownership ratio has come down below 1 to 0.98 as of March 31, 2025. The widest gap between FII and DII holding was in the quarter ending March 31, 2015, when the DII share was a huge 10.32% lower than the FII share. In INR value terms, DII holding was 49.82% lower than FII holding on March 31, 2015, while the FII to DII ownership ratio was 1.99.

Life Insurance Corporation of India (LIC) increased its share to 3.72% as of March 31, 2025, from 3.51% as on December 31, 2024, with a net buy of Rs 34,435 crore, its highest in 5 years. We know that LIC commands a lion’s share of investments in equities by insurance companies, so the overall share of Insurance companies also went up from 5.15% to 5.39%.  

On the other hand, the share of retail and HNI investors decreased to 7.51% and 1.98%, respectively, as of March 31, 2025, from 7.70% and 2.09% as of December 31, 2024. As such, the combined retail and HNI share decreased to 9.49% from 9.79% during the quarter. While individual investors net bought shares worth Rs 19,766 crore during January and February, they booked profits and net sold shares worth Rs 18,925 crore in March when the markets rallied.

The government's share (as promoter) decreased marginally to 9.27% from 9.29% during the quarter, with a net buy value of Rs 393 crore. The share of private promoters, too, decreased to 40.81% from 41.09% despite a net buy value of Rs 7,337 crore.  

Additional Read: What is FPI and DII 

Sector Level Investment Status of DII

Domestic Institutional Investors raised their exposure to the Financial Services sector significantly, increasing it from 25.86% of their total holdings on December 31, 2024, to 27.50% by March 31, 2025. On the flip side, they trimmed their allocation to the Information Technology sector the most, reducing it from 10.32% to 9.11% during the same period.

What Does the Shift in Investments Mean?

India's stock markets are steadily advancing towards greater self-reliance, with domestic investors playing an increasingly dominant role. A major milestone has been reached — DIIs now hold a larger share in Indian equities than FPIs. The day is not far when mutual funds alone could surpass FPI holdings.

For decades, FPIs were the largest non-promoter shareholders, and their investment patterns significantly influenced market trends. That dynamic is changing. As of March 31, 2025, the combined share of DIIs, retail investors, and High Net Worth Individuals (HNIs) has climbed to an all-time high of 27.10%, acting as a strong counterbalance to foreign inflows.

Additional Read: How Does FPI and DII Impact Stock Market