Indian domestic institutional investors have surged to a record 17% ownership in equities by March 2026, filling the void left by a 15-year low in foreign investments amid global geopolitical tensions and market volatility.
Domestic institutional investors have become the dominant force in Indian equities, with their ownership climbing to a record 17% by the end of March 2026, according to the Securities and Exchange Board of India’s annual report. At the same time, foreign portfolio investors’ share fell to 15.8%, the weakest level in 15 years, underscoring how strongly local money has filled the gap left by overseas outflows.
SEBI said domestic institutions, including banks, development finance institutions, insurers, mutual funds and the National Pension System, recorded a cumulative net investment of ₹8.5 lakh crore during 2025-26. The regulator described them as a crucial balancing force, absorbing foreign selling as systematic investment plans continued to channel steady monthly flows into mutual funds.
That domestic support helped steady a market buffeted by global volatility. The Nifty 50 reached a record 26,328.6 in early January 2026 before easing after tensions in the Middle East, and the index ended the financial year down 5.1%. SEBI said foreign investors were unsettled by geopolitical risks in West Asia, higher crude prices and rising US bond yields, all of which pushed capital around global markets.
The shift in ownership also reflects a broader rise in Indian household savings flowing into capital markets. SEBI said SIP accounts rose 3.9% to 10.45 crore in 2025-26 from 10.05 crore a year earlier, while average monthly SIP inflows climbed 25.8% to ₹16,413 crore. Data reported separately by the Times of India, The Economic Times, Mint and Moneycontrol points to the same trend: foreign investors have cut exposure sharply, with selling of nearly ₹2 lakh crore in 2025, while domestic mutual funds and retail investors have increased their footprint, particularly in mid- and small-cap shares.
India’s market still finished the year as the world’s fifth-largest, with total market capitalisation at ₹411.6 lakh crore, SEBI said. The report suggests the ownership balance in Indian equities is becoming more inward-looking, even as foreign investors remain important participants in large parts of the market.
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