Domestic institutional investors (DIIs) have maintained a remarkable streak of net stock buying in the Indian market, infusing a cumulative ₹20,19,580 crore over 38 consecutive months. This sustained buying trend, which began in August 2023 and continued through September 2026, has played a crucial role in stabilizing the market amidst significant foreign portfolio investor (FPI) outflows.
According to data compiled from corporate database AceEquity, DII inflows have more than compensated for the ₹10,45,605.85 crore in FPI outflows recorded during the same period. In September 2026 alone, DIIs, comprising mutual funds, insurance companies, and other financial institutions, purchased domestic equities worth ₹64,758.56 crore.
Record Inflows and Shifting Ownership
The highest monthly DII inflows during this period occurred in March 2026, reaching ₹1,35,725.22 crore. October 2024 was another standout month, with inflows exceeding ₹1 lakh crore at ₹1,07,254.68 crore. For the year 2026 alone, DIIs have collectively pumped ₹6,21,027.97 crore into domestic stocks, demonstrating robust conviction in the Indian market.
This consistent domestic buying has not only provided a cushion against FPI selling but has also structurally altered the ownership landscape of Indian companies. The trend, which gained significant momentum since 2021, saw DII ownership in Nifty 500 companies climb to 21 percent by the end of the June quarter. This marks the ninth consecutive quarter of increasing DII ownership, contrasting sharply with FII holdings, which have recently fallen to a new low of 17 percent in Q1.
Expert Insights on Market Dynamics
Analysts at MOFSL highlighted the unprecedented shift, noting that the past two years have witnessed record FII outflows alongside substantial DII inflows. They pointed out that strong retail participation, supported by steadily rising monthly SIP contributions of approximately ₹30,000 crore, has been instrumental in absorbing the persistent FII selling.
“Surprisingly, the sharp FII outflows of $56 billion over the past 24 months effectively offset the cumulative FII inflows of the previous eight years, leading to near nil cumulative FII investment in the past decade. In contrast, DIIs pumped in a record $177 billion in Indian equities over the past 24 months, 23 percent higher than the cumulative DII inflows over the preceding eight years,” MOFSL stated in a strategy note.
Kotak Institutional Equities echoed this sentiment, observing that retail investors, through DIIs, mutual funds, and insurance companies, have been consistent buyers for several years. Conversely, FPIs, private equity firms, and promoters have been significant sellers over the past 24 months. Kotak also raised a pertinent question regarding the future behavior of retail investors, especially in light of muted trailing returns over two consecutive years.