Mumbai, February 9: A new report reveals that Domestic Institutional Investors (DIIs) have overtaken Foreign Institutional Investors (FIIs) for the first time in terms of stake in the Nifty50 index. According to data from Motilal Oswal Securities, as of the December 2025 quarter, DIIs held approximately 24.8% of the Nifty50, while FIIs accounted for about 24.3%.
Analysts indicate that FII participation has reached its lowest level in the past eight quarters, while domestic capital investments have strengthened. They suggest that this shift is not temporary but rather structural and long-term.
Previously, Domestic Investors had surpassed Foreign Investors in the overall equity market, but they lagged behind in major indices like Nifty50 until this quarter.
Market experts attribute the rapid growth of domestic investments to a projected SIP investment amount of ₹3.34 lakh crore in 2025, increasing participation from pension funds, and the entry of new asset management companies. Additionally, investments from the Employees’ Provident Fund Organization (EPFO) and insurance companies have bolstered domestic institutional investments. Experts believe that while this trend may weaken during market downturns, it is unlikely to reverse.
Over the past five years, the market has yielded good returns due to domestic investors, while foreign investors have sold off approximately ₹9.96 lakh crore during the same period.
Brokerage data shows that FIIs’ stake in Nifty50 has decreased by 90 basis points year-on-year and 20 basis points on a quarterly basis. In contrast, DIIs’ stake has increased by 170 basis points annually and 30 basis points quarterly.
In this quarter, foreign investors reduced their stake in about 78% of Nifty50 companies, while domestic investors increased their investments in approximately 82% of these companies.
In terms of value, the total assets of domestic institutional investors stood at around $24.8 billion, surpassing the $24.3 billion stake held by foreign investors. In 2025, domestic investors made a significant investment of ₹7.44 lakh crore, while foreign investors sold off ₹1.66 lakh crore. Despite this, the Nifty only yielded a 10% return.
A recent report indicated that weak corporate earnings and high stock prices were major contributing factors. However, positive elements such as the India-U.S. trade deal could potentially reverse sentiments and attract foreign investors back.