DIIs hold 18.7% of NSE-listed equities, FII holdings at 13-year low: Economic Survey 2026

The Survey noted that DIIs, particularly mutual funds and insurance companies, have remained consistent net buyers of equities even during phases of foreign portfolio investor (FPI) selling. This sustained domestic buying has helped offset foreign outflows and reinforced resilience in domestic markets.

• DIIs now hold a record 18.7 percent of NSE equities as of September 2025
• DIIs' share surpassed FIIs for the first time in Q4 FY25, continuing into FY26
• Combined DII, retail, and HNI holdings hit 27.8 percent in Q2 FY26

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Domestic institutional investors (DIIs) have emerged as as a stabilising force in Indian equity markets, countering volatility caused by fluctuating foreign capital flows, the Economic Survey has said. As of September 30, 2025, DIIs held 18.7 per cent of equities listed on the National Stock Exchange. The Finance Minister tabled the Economic Survey 2026-2027 on January 29.

The Survey noted that DIIs, particularly mutual funds and insurance companies, have remained consistent net buyers of equities even during phases of foreign portfolio investor (FPI) selling. This sustained domestic buying has helped offset foreign outflows and reinforced resilience in domestic markets. FPIs during FY26 (April-December) have fluctuated, mainly influenced by

global financial conditions rather than domestic macroeconomic factors, the survey highlighted added that the data indicate volatility, with six months of net outflows and three months of sizable net inflows, resulting in a modest net balance for the year-to-date.

A significant structural shift highlighted in the Survey is the change in ownership patterns between domestic and foreign institutional investors. For the first time in Q4 FY25, the share of DIIs by value of holdings surpassed that of foreign institutional investors (FIIs). This trend continued into FY26, with DII share rising to an all-time high of 18.3 per cent in Q2 FY26, while FII holdings declined to 16.7 percent,  a 13-year low.

The growing influence of domestic mutual funds has been a key driver of this shift. In Q2 FY26, mutual funds’ share by value of holdings reached a record 10.9 per cent, strengthening the domestic institutional investor base. The Survey observed that this expansion reflects sustained household inflows into market-linked instruments through systematic investment plans and other long-term investment channels.

The combined share of DIIs, retail investors and high-net-worth individuals reached an all-time high of 27.8 per cent by value of holdings in Q2 FY26, which indicates a more balanced and domestically anchored equity market.