FPI Ownership In Indian Equities At 14-Year Low, DII Stabilise Markets

Foreign portfolio investors’ (FPIs) ownership in Indian equities has dropped to a 14-year low, while domestic institutional investors (DIIs) have significantly increased their presence in the market, according to JM Financial’s Fundamental Research report.

FPI ownership in Indian stocks fell to 14.7 per cent in the March 2026 quarter. This is the lowest level recorded in the last 14 years. In comparison, DII ownership rose sharply to 18.9 per cent during the same period.

“The 12-month FII flow data reveals a market where selling has been the dominant theme, with 10 out of 16 sectors recording net outflows over the period. The bleeding is most severe in IT (-$9,222 million), BFSI (-$6,056 million), and FMCG (-$3,744 million) — three sectors that collectively account for a disproportionate share of Nifty weightage, explaining why index-level FII ownership has been declining steadily,” the JM Financial report quoted as saying by ANI.

The decline in foreign ownership came after sustained selling by overseas investors in recent quarters.

Global uncertainties, high US interest rates, geopolitical tensions, and concerns over valuations in Indian equities have weighed on foreign investor sentiment.

At the same time, domestic investors have continued to pour money into the markets through mutual funds, insurance companies, pension funds, and systematic investment plans (SIPs).

This strong domestic participation has helped cushion Indian equities from heavy volatility despite continuous foreign outflows.

The report added that domestic investors have been consistently buying stocks even during periods when FPIs were reducing exposure.

Mutual funds, in particular, have seen strong inflows through SIPs, helping domestic institutions maintain steady investments in equities.

Insurance companies and pension funds have also increased their allocation towards Indian stocks.

Despite the fall in FPI ownership, Indian markets have remained relatively resilient because of strong support from domestic investors. Analysts believe the increasing role of DIIs has reduced the market’s dependence on foreign capital compared to earlier years.