For the first time, DIIs hold larger share than FIIs in Indian markets

Siddharth Bhamre, Head of Research at Asit C. Mehta Investment Intermediates, highlighted the structural nature of this shift. He noted that FIIs have been consistent net sellers over the past year, whereas domestic flows—largely driven by retail investors via mutual fund SIPs—have remained resilient. While he doesn’t foresee immediate major implications from this change, Bhamre believes it could reduce market volatility, as DII-driven capital tends to be more stable compared to the more transient nature of FII flows.

This trend of rising domestic participation is not new. Since 2021, DIIs have consistently outpaced FIIs in terms of net investments. In 2021, DIIs invested over Rs 98,000 crore, while FIIs added just over Rs 26,000 crore. In 2022, DIIs poured in over Rs 2.76 lakh crore, while FIIs pulled out over Rs 1.28 lakh crore.

In 2023, both investor groups were nearly at par, with DIIs investing Rs 1.81 lakh crore and FIIs Rs 1.74 lakh crore. In 2024, DIIs were again dominant, investing Rs 5.23 lakh crore against FII net sales of Rs 8,000 crore. So far in 2025, DIIs have invested over Rs 2.1 lakh crore, while FIIs have withdrawn over Rs 1.07 lakh crore.

Commenting on the broader trend, Dhananjay Sinha, Co-Head of Equity & Research, Systematix Group, pointed out that FII participation has been inconsistent in recent years, with several phases of major outflows. In contrast, retail investor participation through SIPs and other channels has shown consistent growth. While FIIs remain important market players, their recent selling during bouts of global uncertainty has coincided with market corrections, reinforcing the stabilising role of domestic investors.