DIIs overtake FPIs in NSE ownership for 1st time in 22 years

by IANS |

Mumbai, May 2 (IANS) For the first time in over two decades, domestic institutional investors (DIIs) have overtaken foreign portfolio investors (FPIs) in terms of ownership in companies listed on the National Stock Exchange (NSE), a new report said on Friday.

This shift highlights the increasing interest of Indian investors in equity markets, as more people move away from traditional investment options like fixed deposits and real estate.

According to data compiled by Primeinfobase.com, DIIs held 17.62 per cent of NSE-listed companies in the March quarter, rising by 0.73 percentage points.

Meanwhile, FPIs saw a slight decline of 0.02 percentage points, bringing their stake to 17.22 per cent.

Ten years ago, FPIs held 20.71 per cent, which was more than the combined share of DIIs, retail investors, and high-net-worth individuals at that time.

Over the past five years, domestic institutions such as mutual funds, insurance companies, and pension funds have been investing heavily in the stock market.

"More individuals are now opting for mutual funds, the National Pension System, insurance and direct equities... this has led to an increase in DIIs' ownership of equities," said Aditya Birla Sun Life Mutual Fund chief executive, A Balasubramanian.

Pranav Haldea, Managing Director of Prime Database Group, called this a historic moment for Indian capital markets.

He credited the steady inflow from retail investors through Systematic Investment Plans (SIPs) as a major factor.

This shift in investment patterns has significantly boosted the share of DIIs in the equity market, and experts believe this trend will continue.

Meanwhile, the Indian stock market delivered a strong performance in April despite global uncertainties.

The Sensex climbed 3.65 per cent, while the Nifty rose 3.46 per cent during the month, driven largely by a rally in banking and financial stocks.

Banking stocks led the charge, with the Nifty Bank index jumping 6.83 per cent in April.

Other key sectors like auto, PSU banks, financial services, FMCG, and real estate also saw healthy gains, each delivering returns of over 4 per cent.