Retail investors sold equities, but Zerodha clients bought heavily, highlighting divergence. Overall, direct retail ownership declined while mutual fund holdings hit record highs, reflecting a structural shift toward professionally managed investments and rising domestic institutional dominance in Indian equity markets

Individual investors sold Rs 13,000 crore worth stocks, but Zerodha clients kept buying: Nithin Kamath

Synopsis

Retail investors sold equities, but Zerodha clients bought heavily, highlighting divergence. Overall, direct retail ownership declined while mutual fund holdings hit record highs, reflecting a structural shift toward professionally managed investments and rising domestic institutional dominance in Indian equity markets

Even as individual investors sold nearly Rs 13,000 crore worth of direct equities between December 2025 and March 2026, clients of Zerodha were net buyers by almost the same amount, according to a post by co-founder Nithin Kamath.

"Individual investors apparently sold ₹13,000 crores of direct equities from December 2025 to March 2026. Our clients were net buyers to a similar tune," Kamath wrote on Tuesday.

But Kamath said the bigger trend is elsewhere. "Btw, all the retail participation has been through mutual funds. Direct retail ownership has been pretty much flat to declining," he added.

His comments come as fresh ownership data shows Indian retail investors are increasingly shifting away from directly picking stocks and moving towards professionally managed mutual fund portfolios. According to a report by Prime Infobase, the combined shareholding of individual investors in NSE-listed companies fell to a five-year low of 9.11% in the March 2026 quarter, down from 9.28% in December 2025.

In contrast, domestic mutual funds raised their holdings to an all-time high of 11.46%, marking the eleventh consecutive quarter of growth.

Live Events

"This is indicative of the growing maturity of individual investors, who are now increasingly preferring to invest through a professional fund manager via mutual funds rather than investing in stocks directly," said Pranav Haldea, MD of Prime Database Group.

The shift becomes even clearer when viewed over the longer term. Back in March 2012, mutual funds held just 3.21% of listed Indian equities, compared with 8.51% held directly by individuals.

Fourteen years later, direct retail ownership has stayed broadly flat at 9.11%, while mutual fund ownership has surged to 11.46%, overtaking individual investors and moving closer to foreign institutional ownership.

The report shows that foreign institutional investors, or FIIs, now hold just 16.13% of Indian equities, a 14-year low, amid sustained global risk-off sentiment, geopolitical tensions and valuation concerns.

The gap between FII and mutual fund ownership has now shrunk to just 4.67 percentage points, compared with 17.14 percentage points in 2015.

Prime Infobase said domestic institutional investors, led by mutual funds, are increasingly becoming the market’s biggest stabilisers as retail money flows in through systematic investment plans.

The trend is visible in monthly SIP numbers as well, with gross SIP inflows now hovering near record levels of Rs 32,000 crore, helping domestic institutions absorb selling from foreign funds.

Prime Infobase said the shift started after demonetisation in 2016, accelerated during the pandemic years and has strengthened further over the past 18 months amid global geopolitical uncertainty and volatile foreign flows.

Domestic institutional ownership, including mutual funds, insurance companies, banks and alternative investment funds, reached another all-time high of 19.24% in the March quarter, reinforcing what market participants increasingly describe as India’s "atmanirbhar" ownership model.

(You can now subscribe to our ETMarkets WhatsApp channel)

(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today.

Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

...moreless

(You can now subscribe to our ETMarkets WhatsApp channel)

Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today.

Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

...moreless

Why Jio BlackRock is taking a U-turn to reach investors

How this man proved M&As need not be disasters even if tough

3 years on, India rebuilds aircraft lessors’ trust that Go First broke

98 million SIP accounts power Indian equities. What if they stop?

First-time buyers, entry cars: The missing links in India’s auto boom