DIIs Overtake FIIs In Nifty 50 Ownership For The First Time

For the first time, domestic institutional investors (DIIs) have edged past foreign institutional investors (FIIs) in terms of their ownership in the Nifty 50 index. This marks a significant shift in the market’s ownership structure. Nifty 50 tracks the largest 50 companies of the country. As of the December 2025 quarter, DIIs held roughly 24.8 per cent of the index, slightly ahead of FIIs at about 24.3 per cent, according to Motilal Oswal Securities. FII ownership is now at an eight-quarter low.

This crossover is notable because, while domestic investors had overtaken foreign investors in overall equity ownership earlier, FIIs had continued to dominate heavyweight Nifty 50 constituents until now.

“This is a remarkable milestone for India’s equity markets,” says Varun Gupta, CEO, Groww Mutual Fund. He adds that it 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 further anchor the Indian markets domestically.”

The shift comes against the backdrop of sustained foreign selling, triggered by global trade uncertainties, volatile markets, elevated interest rates overseas and a strong dollar. At the same time, domestic flows have remained resilient, supported by steady mutual fund investments, insurance money and pension allocations.

“DIIs now holding a larger share than FIIs in the Nifty 50 underscores a fundamental shift toward stronger domestic participation in India’s equity markets,” says Himanshu Srivastava, Principal, Manager Research, Morningstar Investment Research India. He believes this reflects the growing strength of domestic capital pools. “The change has been driven by sustained mutual fund SIP inflows, rising retail participation, and steady allocations from insurance and pension funds, even as FIIs turned cautious amid global macro uncertainty, elevated overseas rates, and a stronger dollar.”

At a stock level, domestic ownership saw the sharpest year-on-year increase—by more than four percentage points—in companies such as Eternal, Dr. Reddy’s Laboratories, Asian Paints, Tech Mahindra, InterGlobe Aviation, Trent, Max Healthcare Institute, Shriram Finance, Axis Bank, Bajaj Auto and Tata Consumer Products. These gains reflect consistent buying by domestic funds even as foreign investors trimmed exposure.

Foreign investors, however, were not uniform sellers. FIIs raised their year-on-year holdings in select index companies, including Bharti Airtel, Eicher Motors, Grasim Industries, Bharat Electronics, Bajaj Finserv, Bajaj Finance, Hindalco Industries, Maruti Suzuki India, Wipro and InterGlobe Aviation, indicating a more selective approach rather than a broad-based exit.

According to experts, the shift is likely to act as a cushion for domestic stock markets during periods of global stress. “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, ultimately making India’s equity market structure more resilient and aligned with domestic growth fundamentals,” says Srivastava.

Taken together, the data suggest India’s equity markets are becoming increasingly domestically anchored, less vulnerable to sudden foreign exits and more reflective of local savings, growth expectations and long-term capital.