22 out of 24 sectors in Nifty 500 see higher DII ownership as stake hits record 21% in December 2025

On a sequential basis, DIIs added most to NBFCs (non-lending), private banks, capital goods, NBFCs (lending) and consumer stocks, showing continued preference for financials and domestic cyclicals.

• DIIs increased ownership in 22 of 24 Nifty-500 sectors in CY25
• DII ownership hit a record 20.6% in December 2025, overtaking FII ownership
• DIIs invested $90.1bn in CY25, offsetting $18.8bn of FII outflows

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Domestic institutional investors (DIIs) expanded their footprint across Indian equities in CY25, increasing ownership in 22 out of 24 Nifty-500 sectors, with only media and logistics seeing a decline,. The broad-based buying pushed overall DII ownership to a record 20.6% in December 2025.

The sectoral spread of DII buying was wide. On a year-on-year basis, the sharpest increases were seen in EMS, technology, telecom, retail, PSU banks and healthcare. On a sequential basis, DIIs added most to NBFCs (non-lending), private banks, capital goods, NBFCs (lending) and consumer stocks, showing continued preference for financials and domestic cyclicals.

According to Motilal Oswal (MOFSL)'s latest report, Indian markets ended CY25 with positive returns despite significant volatility and $18.8bn of foreign institutional investor (FII) outflows, largely driven by geopolitical tensions and global risk-off episodes. Sentiment improved late in the year following the announcement of the Indo-US trade deal, coming after the Indo-EU FTA and earlier agreements with the UK, EFTA and New Zealand, easing concerns around India’s global positioning. The Union Budget added to stability by signalling fiscal continuity without major near-term surprises.

Measured as a share of free float, DII ownership rose to 40.3%, overtaking FII ownership at 36%, with the FII–DII ratio steady at 0.9x. At the company level, DIIs increased stakes in 72% of Nifty-500 stocks, while FIIs reduced holdings in 58%.

According to the report, DII holdings in Nifty constituents increased the most by over 4 percentage points year-on-year in stocks such as Eternal, Dr. Reddy’s Laboratories, Asian Paints, Tech Mahindra, InterGlobe Aviation, Trent, Max Healthcare, Shriram Finance, Axis Bank, Bajaj Auto and Tata Consumer Products. On the other had, FII holdings saw a year-on-year rise in Bharti Airtel, Eicher Motors, Grasim Industries, Bharat Electronics, Bajaj Finserv, Bajaj Finance, Hindalco Industries, Maruti Suzuki, Wipro and InterGlobe Aviation.

Domestic money offsets foreign selling

DIIs invested $23.4 billion in 4QCY25 and $90.1 bn during CY25, supported by steady SIP inflows into domestic mutual funds. These flows helped absorb $18.8bn of net FII selling and a strong rebound in the primary market, with IPOs and FPOs raising Rs 1.95 trillion over the year. As a result, DII ownership in the Nifty-500 rose for the seventh consecutive quarter, climbing 210bp year-on-year (+60bp QoQ) to 20.6% in December 2025. FII ownership, by contrast, declined 50bp YoY to 18.4%, remaining largely flat sequentially.

FIIs, on the other hand, showed a more selective approach, the report highlighted. On both a year-on-year and sequential basis, FIIs increased stakes in PSU banks, telecom, oil & gas, chemicals, NBFC-lending, insurance and metals, but reduced exposure to 15 sectors YoY, including EMS, consumer durables, technology, infrastructure, retail and private banks.

Promoter holdings decline Promoter holdings continued to trend lower, falling to a record 48.8% in December 2025 (-90bp YoY), as strong valuations and market liquidity encouraged stake dilution. Retail ownership also slipped to 12.1%, reflecting limited participation from individual investors despite the market rebound.