Desi power seen in stock market, DII became top investor leaving FII behind

Business News: If you think that only foreign investors decide the trend of the Indian stock market, then now is the time to change this thinking. Because for the first time, Indian domestic institutional investors i.e. DII (Domestic Institutional Investors) have left behind foreign institutional investors (FII).

Domestic investors made history

According to the data of March 2025, DII's share in the stock market has reached 17.62 percent, which is the highest ever. At the same time, FII's share has come down to 17.22 percent and this is the lowest level in the last 12 years.

What changed in this story?

There is a very interesting trend behind this big change. This trend is the continuous investment in mutual funds, especially through SIP (Systematic Investment Plan). In Q4 alone (January to March 2025), an investment of Rs 1.16 lakh crore was made through SIP. Due to this, for the first time, the share of mutual funds also crossed 10 percent.

Dollar strong, FII weak

Rising bond yields in the US and a strong dollar kept foreign investors away from the Indian market. For this reason, FIIs sold shares worth a total of Rs 1.29 lakh crore in this quarter, while making a meagre purchase of Rs 13,000 crore in the primary market. Overall, a net outflow of Rs 1.16 lakh crore was recorded.

Why is this trend important?

This trend is not just a game of numbers. Its direct effect is that now the Indian stock market is becoming less volatile. That is, when FIIs sell, DIIs are buying and maintaining the balance and there is no major fall in the market.

What will happen next?

Experts believe that if this trend continues, India will have to reduce its dependence on foreign capital. Strong domestic investment will provide long-term stability to the market and when FIIs return (say after global rate cuts), the combination of both DII-FII can take the Indian stock market to new heights.