DII inflows hit record high over past 12 months, double of FII outflows

Domestic institutional investors have kept their inflows into the markets steady, even as Dalal Street grapples with volatility and uncertainty. In a note, ICICI Securities stated that over the trailing 12 months, total DII inflows in the secondary market stood at a record high of $80 billion, which is twice that of foreign portfolio investor (FPI) outflows ($40 billion).

The magnitude of counter-buying by DIIs against heavy FPI selling far surpasses previous
episodes, including the Global Financial Crisis of 2008 and the sell-off seen in 2022.

Despite the strong domestic support to Dalal Street, the bouts of aggressive FPI selling in recent months have capped returns. Indices across market-capitalisations have delivered flat to negative performance over the past 12 months period. According to the brokerage, this reflects the drag from sustained foreign withdrawals, even as domestic investors absorbed the supply.

ICICI Securities noted that before the FPI exodus began in July 2025, foreign investors were net buyers across market-capitalisations in the first quarter of FY26. Alongside DIIs, FIIs had accumulated shares while the equity supply came from promoters, individual investors (barring small caps), and foreign direct investors.