In the last 12 months, total inflows from domestic institutional investors (DIIs) in the secondary market in the last 12 months stood at a record $80 billion, according to industry data. This is more than double the $40 billion outflow from foreign portfolio investors (FPIs).
Despite the recent volatility on Dalal Street, the counter-buying by DIIs in response to significant selling by FPIs has been higher than in past instances, including the 2008 global financial crisis and the 2022 sell-off, a report from ICICI Securities said.
DIIs have invested over Rs 4 lakh crore in the Indian stock market this year, the biggest inflow by the category in the cash market during the first seven months since 2007.
Despite this strong domestic support, aggressive selling by FPIs in recent months has limited returns in the Indian stock market. Indices across all market capitalisations have performed from stable to negative over the past 12 months.
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From April to June, FPI investments ranged between USD 1.2 and USD 2.3 billion, while the trend reversed in July, with withdrawals reaching USD 2.9 billion, and selling continued in August.
ICICI Securities noted that ahead of the FPI exodus in July 2025, foreign investors were net buyers across all market capitalisations in Q1FY26. DIIs and FIIs accumulated shares, while promoters, individual investors (except small caps) and foreign direct investors provided equity supply.
In July 2025, FPIs pulled out USD 2.9 billion from India. In contrast, Taiwan attracted investments of USD 18.3 billion, Japan USD 16.1 billion and South Korea USD 4.5 billion. In August, India and South Korea saw more outflows. Japan gained USD 12.5 billion, and Indonesia saw USD 515 million.
In just seven months of 2025, DIIs secured over 80 per cent of the total inflows of 2024, providing the necessary support to the market. DII inflows reached 2.2 percent of average Nifty market capitalisation in 2025, the highest level since 2007.
With IANS inputs
