DII holdings in Nifty-500 hit record 21%; FII ownership falls to all-time low of 17%: Motilal Oswal
New Delhi, August 6
Domestic institutional investors have strengthened their dominance in the Indian equity market, with their holdings in Nifty-500 companies rising to a record high of 21 per cent, while foreign institutional investor ownership has declined to an all-time low of 17 per cent, according to a report by Motilal Oswal Financial Services.
The report highlighted a structural shift in institutional ownership that has been building momentum over the past few years, led by sustained domestic inflows into equities.
"This structural shift in institutional ownership, which has gained momentum since 2021, continues to strengthen as DII holdings scale new peaks, accounting for 21 per cent of Nifty 500 companies in run rate," the report said.
According to the report, DII ownership in Nifty-500 companies increased by 160 basis points year-on-year and 20 basis points sequentially to touch an all-time high of 21 per cent in June 2026. During the same period, FII ownership declined by 190 basis points year-on-year and 10 basis points quarter-on-quarter to 17 per cent from 18.9 per cent in June 2025, marking the lowest level on record.
The report noted that domestic investors have steadily increased their participation in Indian equities even as foreign investors have reduced their holdings over the past few years, resulting in a significant change in the ownership structure of listed companies.
Motilal Oswal also pointed to a reversal in promoter ownership trends. "Promoter holdings, which have historically remained range-bound, experienced an increase of 20bp YoY (+10bp QoQ) to 49.5 per cent in Jun'26," it said.
Meanwhile, retail ownership witnessed a marginal sequential decline. "Retail holdings dipped 10bp QoQ to 12.6 per cent in Jun'26 (+20bp YoY)," the report added.
The report further showed that domestic institutions now hold a larger share of the market than foreign investors across the Nifty-500 universe, underlining the growing role of domestic capital in supporting Indian equities.
Sector-wise, foreign institutional investors held the highest proportion of free-float holdings in Real Estate (49 per cent), followed by Private Banks (45 per cent) and Telecom (43 per cent) as of June 2026.
On the other hand, domestic institutional investors had the highest free-float ownership in PSU Banks (56 per cent), followed by Consumer (49 per cent), Oil & Gas (46 per cent) and Insurance (45 per cent).
The report suggests that the increasing share of domestic institutional investors, coupled with declining foreign ownership, reflects a broad-based structural shift in India's equity ownership pattern, with domestic capital playing an increasingly important role in driving the country's stock markets.
— ANI
Reader Comments
Good to see domestic institutions stepping up, but let's not celebrate prematurely. FIIs still hold 17% and they have outsized influence on market direction due to their trading patterns. Also, a lot of DII money is actually retail money via mutual funds and NPS. We need to look deeper at the quality of this DII investment.
Finally we are seeing the result of financialization of Indian savings! Middle class has started believing in equity markets. This structural shift means even if US Fed does something or there's global turmoil, our market won't fall as much as before. Aatmanirbhar Bharat in true sense! 💪
The PSU banks seeing 56% DII ownership is interesting. Government policies + public faith in PSUs = strong domestic support. Meanwhile, FIIs still love our real estate sector at 49%. This tells us the kind of growth stories both sides are betting on.
I have a different take. FIIs exiting might also reflect global opportunities elsewhere or hedging strategies. Let's not be too jingoistic about it. Also, DIIs are often forced to buy when market falls to support it; they're not always making prudent decisions. But yes, long-term, self-reliance is better for market stability.
Great news! This means our insurance companies, mutual funds and pension funds are doing their job. PSU banks at 56% DII ownership shows institutional confidence in government-owned lenders after the cleanup. The future of Indian markets is in our own hands now!
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