According to report by Moneycontrol, domestic institutional investors (DIIs) overtook foreign institutional investors (FIIs) in ownership of India's benchmark Nifty50 index for the first time in the December 2025 quarter. This was a change in the way index-level ownership patterns worked.

As of the December 2025 quarter, DIIs held 24.8% of the Nifty50, marginally higher than FIIs, whose ownership declined to 24.3%, the lowest level in eight quarters, according to FII DII data. DIIs had more Indian stocks than FIIs in the past, but they had always been behind foreign investors in the Nifty50 until this quarter.

During 2025, there were a lot of strong local inflows at the same time as the rise in domestic ownership. The Association of Mutual Funds in India reported that systematic investment plans brought in ₹3.34 lakh crore in 2025. This shows that people in India are still interested in investing in stocks. According to reports from regulators, pension and insurance funds also continued to invest in stocks during this time.

In contrast, FIIs reduced their exposure to Indian equities amid global volatility and currency pressures. Over the past five years, cumulative net FII selling in Indian equities amounted to nearly ₹9.96 lakh crore, according to exchange data. Despite this, the Nifty50 made returns of 72% to 75% over the same time period, thanks to buying by domestic institutions.

Data showed that FII holdings in the Nifty50 declined by 90 basis points year-on-year and 20 basis points quarter-on-quarter during the December 2025 quarter. DII ownership reached an all-time high, going up 170 basis points year over year and 30 basis points month over month.

The ownership divergence was broad-based across index constituents. FIIs reduced their holdings in nearly 78% of Nifty50 companies during the quarter, while DIIs increased their stakes in about 82% of index stocks, according to the same dataset.

In value terms, assets under custody held by DIIs in the Nifty50 stood at approximately $24.8 billion, edging past FII holdings of about $24.3 billion, Motilal Oswal Securities data showed.

At the stock level, DII ownership increased sharply on a year-on-year basis in companies such as Dr Reddy’s Laboratories, Asian Paints, Tech Mahindra, InterGlobe Aviation, Axis Bank, Bajaj Auto, Tata Consumer Products, Trent, and Shriram Finance. FIIs increased holdings in select stocks, including Bharti Airtel, Maruti Suzuki India, Hindalco Industries, Wipro, Bajaj Finance, Bajaj Finserv, and Bharat Electronics during the same period.

The December quarter data confirms that domestic institutions now hold the largest ownership share in India’s most widely tracked equity index, reflecting a change in participation patterns at the benchmark level.