Domestic institutional investors (DIIs) invested a record Rs 6 lakh crore in Indian equities in calendar year 2025, marking the highest annual inflow since the BSE began maintaining data in 2007. The strong domestic inflow offset the selling effect by foreign portfolio investors (FPIs) during CY25, who pulled out $23.3 billion or over Rs 2 lakh crore from Indian equities, National Securities Depository Limited (NSDL) data showed.
Net DII investment, comprising banks, DFIs, insurance companies, pension schemes, and mutual funds, surpassed Rs 5.26 lakh crore investment in CY24, highlighting growing domestic support for equities. FPIs, however, invested Rs 49,590 crore in domestic equities via primary market and other routes in CY25.
Analysts forecasted the momentum to be sustained going ahead, largely due to SIP flows, which remain resilient even on a market decline. They said that unless a global shock causing a 30–40 per cent correction occurs, DII flows will surpass the 2025 levels in CY26.
Further, if the tariff concerns subside, global investors could eventually play catch-up, they indicated. DIIs have benefited from purchasing during sell-offs since the Lehman crisis, when FIIs entered the panic selling phase, according to multiple reports.
Analysts observed that domestic institutional investors increased their weight in the BFSI, capital goods, healthcare, and auto sectors. DII inflows helped absorb selling pressure from FIIs, significant promoter offloads and profit-booking by private equity funds. Strong domestic flows, however, have not led to widespread gains. Indices across all market capitalisations have shown flat to negative performance over the past 12 months.
However, in terms of YTD returns, the Sensex and Nifty index are up 5.11 per cent and 6.56 per cent, respectively. The BSE Smallcap index has tanked 5.6 per cent, while BSE Midcap index is down 1.6 per cent so far in CY25.
