Domestic institutional investors (DIIs) have already net bought a record Rs 5.3 lakh crore of equities in 2025, surpassing the full-year total of Rs 5.22 lakh crore in 2024. Mutual funds drove most of the buying, contributing Rs 3.65 lakh crore, supported by monthly SIP inflows of over Rs 25,000 crore. Their cash holdings remained high at Rs 1.98 lakh crore in August.
Insurance companies and pension funds added over Rs 1 lakh crore, while other investors including portfolio managers, alternative funds, and banks contributed the remainder. Analysts, however, note early signs of slowing momentum as market returns stagnate and global headwinds affect sentiment.
Despite strong DII inflows, Indian equities have underperformed global peers. The Sensex rose just 2 per cent and the Nifty 4 per cent in dollar terms this year, compared with double-digit gains in major Asian and Western markets. Rising redemptions from small-cap and thematic funds, along with GST rationalisation and festive spending, could limit new equity allocations.
Meanwhile, foreign institutional investors (FIIs) have remained net sellers, offloading Rs 1.80 lakh crore so far in 2025. However, FIIs continue buying in the primary market, acquiring Rs 1,559 crore in September. Analysts believe corporate earnings growth above 15 per cent in FY27 could turn around FPI sentiment.
