Domestic investors have set a new record of investment in the March quarter.
In comparison to foreign investors, domestic investors have invested heavily in the stock market. Because of which he has made a new record. According to a report released by Motilal Oswal Financial Services on Tuesday, domestic institutional investors (DIIs) have strengthened their hold on Indian equities. Their stake in Nifty 500 companies increased to a record 20.9 percent in the March quarter, while the stake of foreign institutional investors (FIIs) declined to 17.1 percent. It was reported in the report that the Indian stock market remained unstable in FY 26. This was mainly due to global uncertainties, especially geopolitical tensions arising from the Iran-Israel/US conflict, however, domestic investment inflows provided strong support to the market.
investment by domestic investors
DIIs continued to support the market and invested $27.2 billion in the January-March 2026 period. Steady Systematic Investment Plan (SIP) inflows also contributed to this. In contrast, investment flows from FIIs remained volatile. Sold $15.8 billion during this quarter. This also includes the massive selling of $14.2 billion in the month of March due to increasing geopolitical tensions. The report said that once the war environment calms down, there is a strong possibility of improvement in the investment flow of FIIs. Even if there is a reduction in selling, the market will take it positively. At the same time, if the investment flow becomes completely positive, then a strong rise can be seen in the market.
change in stake
The FII-DII stake ratio in the Nifty 500 declined to 0.8 times in March 2026, reflecting a structural change in institutional ownership. The report further states that on the basis of 'free-float' (shares freely available in the market), the share of FIIs declined to 33.8 percent, while the share of DIIs increased to 41.2 percent. Compared to the previous year (year-on-year basis), the share of DIIs in the Nifty 500 increased by 170 basis points to an all-time high of 20.9 percent in March 2026. In contrast, the share of FIIs declined to 17.1 percent from 18.9 percent a year ago.
Where did DIIs invest more?
Promoters' stake remained almost stable at 49.4 per cent, while retail investors' stake increased slightly to 12.7 per cent during the same period. Sector wise, DIIs have increased their investment in 21 out of 24 sectors. The highest growth was seen in private banks, technology, telecom, real estate, healthcare and NBFC-lending segments. However, the share of DIIs declined in sectors like EMS, NBFC (non-lending) and metals. Investment trends by FIIs showed that their investment in the BFSI segment has declined to 32.1 per cent. At the same time, their investments have increased in metals, healthcare, utilities and oil and gas sectors. The special thing is that in March 2026, FII investment in the technology sector came down to its lowest ever level of 7.3 percent.
DIIs play an important role in the market
It has been said in the report that the share of large-cap, mid-cap and small-cap stocks in the total market capitalization of Nifty 500 was 67 percent, 22 percent and 11 percent respectively. DIIs have increased their investment in both the private and PSU segments, which now stand at 21.5 percent and 17.5 percent respectively. It has been emphasized in the report that domestic investors are playing an important role in handling the ups and downs in the market. If the outflow of FII money slows down even a little, or money starts coming into the market again, then this can provide even more support to the equity markets.
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