Domestic institutional investors (DIIs) continued to strengthen their presence in Indian equities, with their holdings in Nifty 500 companies rising for the ninth consecutive quarter to an all-time high of 21 percent in June 2026, according to a Motilal Oswal Securities report.
In contrast, foreign institutional investors (FIIs) saw their holdings decline to a record low of 17 percent. The report said record DII inflows of $166 billion over the past 22 months, supported by average monthly SIP inflows of around $3 billion, helped offset cumulative FII outflows of $58 billion during the same period.
During the second quarter of calendar year 2026, DIIs invested $22.8 billion in Indian equities, while FII outflows stood at $13.2 billion despite inflows of $1.3 billion in the second half of June after net outflows of $4.3 billion in the first half of the month. Promoter holdings rose to 49.5 percent in June 2026, while retail holdings stood at 12.6 percent.
Sector-wise, DIIs increased their holdings in 19 of the 24 Nifty 500 sectors on a year-on-year basis, with the biggest additions in private banks, telecom, real estate, technology, healthcare, insurance, automobiles, PSU banks, NBFC lending, retail and capital goods. FIIs, meanwhile, reduced their holdings in 19 sectors, with the sharpest declines seen in private banks, EMS, NBFC non-lending, technology, real estate, retail, automobiles, healthcare, consumer, oil and gas, insurance, cement and utilities.
The FII-to-DII ownership ratio in the Nifty 500 remained unchanged sequentially at 0.8 times in June 2026. As a share of the Nifty 500 free float, FII ownership declined to 33.6 percent, while DII ownership rose to 41.5 percent. FIIs reduced their holdings in 59 percent of Nifty 500 companies over the past year, whereas DIIs increased their stakes in 73 percent of the companies. Within the Nifty 50, FIIs cut holdings in 72 percent of companies, while DIIs raised their stakes in 82 percent.
Across market capitalisation segments, DII holdings climbed to record highs in large-, mid- and small-cap stocks, while FIIs reduced their holdings across all three categories on a year-on-year basis. DII holdings in private companies also reached an all-time high of 21.8 percent, while their stake in PSU companies stood at 17.3 percent. FII holdings in private companies fell to 19.4 percent, while their stake in PSUs moderated to 9.7 percent.
FII allocation to the BFSI sector, comprising private banks, PSU banks, NBFCs and insurance, rose to 34.6 percent of the Nifty 500 in June 2026, remaining overweight by 370 basis points compared with the sector's weight in the index. Automobiles accounted for 8 percent of FII allocation, followed by healthcare at 6.9 percent, oil and gas at 6.5 percent and capital goods at 6.2 percent, while technology allocation fell to an all-time low of 5.6 percent. Private banks accounted for the largest share of FII holdings at $158 billion, with HDFC Bank, ICICI Bank, Reliance, Bharti Airtel and Axis Bank together contributing 27 percent of the total holding value.
DII allocation to the BFSI sector also touched an all-time high of 29.4 percent in June 2026. The sector was followed by automobiles at 7.9 percent, consumer at 7.6 percent, capital goods at 7.4 percent and oil and gas at 7.3 percent. Private banks accounted for the largest share of DII holdings at $148 billion, followed by automobiles, consumer, capital goods and oil and gas. HDFC Bank, ICICI Bank, Reliance, ITC and SBI together accounted for 20 percent of the total DII holding value.