Mutual Fund Equity Ownership Reaches 11.7% as Gap With FPIs Narrows

Key Takeaways

• Domestic mutual funds' ownership of Indian equities increased to a record 11.7% in September 2026.
• Foreign portfolio investors' ownership fell below 14%, reducing the gap between the two groups to approximately 230 basis points.
• A separate analysis placed foreign institutional ownership at 15.1%, illustrating differences in the coverage and methodology of ownership datasets.

Mutual Funds Increase Their Share of Indian Equities

Domestic mutual funds have increased their share of Indian equity ownership to 11.7%, narrowing the gap with foreign portfolio investors (FPIs) to its lowest recorded level.

According to an Economic Times report published on October 12, the gap between domestic mutual fund holdings and FPI ownership declined to approximately 230 basis points in September 2026.

The report, citing NSDL data, placed foreign portfolio investors' share below 14%.

The trend reflects the growing ownership presence of domestic mutual funds in India's listed equity market.

However, mutual funds have not overtaken FPIs in overall equity ownership under the reported figures.

Domestic and Foreign Ownership Trends Diverge

A separate analysis published by Business Standard on October 12 also examined declining foreign institutional ownership.

Citing research from OmniScience Capital, the report placed FII ownership at 15.1%, a 17-year low under the methodology used in that study.

The research simultaneously estimated that the absolute value of foreign investors' Indian equity holdings had increased approximately 3.6 times since 2012, reaching around $783 billion.

These findings demonstrate an important distinction between ownership percentages and the market value of investments.

A reduction in foreign investors' percentage ownership does not necessarily indicate an equivalent reduction in the absolute value of their holdings.

The two ownership percentages reported by Economic Times and Business Standard should not be directly compared without accounting for differences in the securities universe, measurement period and investor classification.

Mutual Fund Participation Becomes More Prominent

Domestic mutual funds receive investments through channels including systematic investment plans and lump-sum subscriptions.

Their participation in the equity market has become increasingly relevant as the industry's asset base and recurring contributions have expanded.

September 2026 AMFI data showed SIP contributions reaching ₹32,490 crore, while equity-oriented schemes received net inflows of ₹38,306.55 crore.

These figures measure investor contributions and scheme flows, rather than changes in equity ownership. Nevertheless, they provide context for the scale of domestic mutual fund activity.

The narrowing difference between mutual fund and FPI ownership indicates a changing composition of institutional participation in Indian equities.

It does not establish that domestic flows will offset foreign selling in every market environment.

The latest ownership figures are particularly relevant for tracking the relative influence of domestic and overseas institutions on India's listed companies.