DIIs Pump in Over ₹4 lakh Crore in Indian Stocks As Foreign Investors Pull Out

Despite volatile market circumstances and continuing outflows by foreign investors, domestic institutional investors (DIIs) have pumped in over ₹4 lakh crore in Indian equities in the first five months of 2026, underlining the continued local engagement.

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DIIs, which include mutual funds, banks, insurance companies and retirement funds, invested over ₹4 lakh crore between January and the first five trading sessions of June, with seven months still remaining in the calendar year.

Strong Inflows Continue Through 2026

The month-wise investment pattern shows DIIs invested ₹69,220 crore in January, ₹39,702 crore in February and nearly ₹1.4 lakh crore in March. Investments continued with ₹43,892 crore in April and ₹82,669 crore in May. During the first five trading sessions of June, DIIs invested another ₹33,933 crore.

The inflows have come at a time when Indian equity markets have witnessed significant fluctuations. Foreign investors have withdrawn around $27.13 billion from Indian equities so far in 2026, while geopolitical tensions involving the U.S., Iran and Israel have pushed crude oil prices above $100 per barrel, raising concerns over inflation and fiscal pressures.

Domestic Flows Supported By Long-Term Capital

According to Rishabh Nahar, Partner and Fund Manager at Qode Advisors, domestic institutional inflows continue to be supported by long-term structural factors rather than short-term market movements.

He said monthly systematic investment plan (SIP) contributions are running above ₹30,000 crore, while allocations from the Employees' Provident Fund Organisation (EPFO), National Pension System (NPS) and insurance funds continue to provide a steady stream of capital to equities.

The steady inflow of domestic savings into equity markets has helped offset the impact of foreign investor selling and has provided support during periods of heightened volatility.

Equity Markets Remain Under Pressure

Indian benchmark indices have delivered negative returns so far in 2026. The Sensex is down 13.7% and the Nifty has shed 11.5%.

The overall market has held up relatively well. The BSE MidCap 150 Index is down 2.6% over the time while the BSE SmallCap 250 Index is down 0.5%. The buying trend has maintained with domestic institutions adding to equities exposure despite a lower market.

Multi-Year Trend Of Rising Domestic Participation

The strength in domestic inflows has been building over the last several years. DIIs have been steady investors of equities since the start of 2024, when Indian markets became volatile owing to high valuations, continued foreign outflows, tariff related fears and a weaker currency.

Domestic institutional investors (DIIs) have invested a record ₹7.75 lakh crore in 2025, the highest-ever yearly investment by domestic institutions. This followed investments of ₹5.23 lakh crore in 2024, which was the second-highest yearly inflow. In comparison, DIIs invested ₹1.82 lakh crore in 2023 and ₹2.76 lakh crore in 2022.

Shashank Udupa, Founder of Vayu Capital, said domestic institutions remain positive on Indian equities due to improving corporate fundamentals, better promoter quality and the growing number of quality listed businesses.

Nikunj Saraf, CEO of Choice Wealth, said regular inflows through SIPs, NPS contributions, EPFO allocations and insurance investments have helped absorb foreign selling pressure. He added that the continuity of domestic inflows will depend on the resilience of household savings and the absence of large-scale retail redemptions.