FPI equity ownership plunges to 14-year low of 16.13% in FY26

With foreign investors continuing to withdraw from Indian equity markets — pulling out close to $18.9 billion in calendar year 2025 and $20.5 billion during March–April 2026 alone — their ownership of domestic equities has plunged to a 14-year low of 16.13% in March 2026. This compares with a peak of 20.70% in March 2015.

The share of domestic institutional investors (DIIs), however, reached a new high of 19.24%. On the other hand, the ownership share of individual investors (retail and HNIs) declined to a five-year low of 9.11% in March 2026, down from 9.28% in December 2025. Within this, retail investors’ share fell from 7.25% to 7.12%, while HNI share slipped from 2.03% to 1.99%.

According to Prime Database data, DIIs, along with retail investors and high net worth individuals (HNIs), together owned 28.34% of the market as of March 2026. DII holdings rose to an all-time high of 19.24% from 18.72% in December 2025, while mutual funds (MFs) also hit a record high share of 11.46%.

The share of DIIs increased to 19.24% in March 2026, up from 18.72% in December 2025, backed by a net investment of Rs 2.51 lakh crore in the quarter. MFs played the biggest role, while insurers, banks and alternative investment funds (AIFs) also contributed with net investments of Rs 28,784 crore, Rs 1,621 crore and Rs 512 crore, respectively.

Meanwhile, MFs continue to narrow the gap with FPIs, with the gap shrinking by a sharp 83 basis points in March to 4.67%. The gap stood at 9.34% in December 2023 and had peaked at 17.14% in March 2015, when FPI share was 20.70% and MF share just 3.56%, said Pranav Haldea, managing director of Prime Database.

The trend of MFs increasing their market share began after demonetisation in November 2016, accelerated during the Covid years, and has strengthened further over the past 18 months due to geopolitical concerns and valuation issues for FPIs, among other factors.

MFs, flush with retail inflows through systematic investment plans (SIPs), made net investments of Rs 1.42 lakh crore in the March quarter alone, while FPIs recorded net outflows of Rs 1.31 lakh crore.