A new era has come into the Indian stock market, the era of domestic investors. The DIIs’ ownership overtake is something to look out for in this current market scenario. So, it was mostly the FIIs (foreign institutional investors) who directed the market by buying or selling securities in bulk. Now, the DIIs (Domestic Institutional Investors) are taking charge and overpowering FIIs slowly by investing more in the market. In the December 2024 quarter, the ownership gap between the FIIs and DIIs declined to the lowest ever in history as FIIs were selling off and reducing their exposure while DIIs were buying and flushing the market with liquidity.
FII-DII Ownership Battle
The foreign investors’ holding in the companies listed on the National Stock Exchange (NSE) dropped to 17.23% which is a 12-year low. On the contrary, the domestic holdings went up to 16.9% during the same period with the growing participation of domestic investors and not only that, the domestic mutual funds touched an all-time high of 9.93% during the same period.
The gap between FIIs’ and DIIs’ ownership in the Indian equity market stood at 0.3% only during the end of the December quarter. This ratio stood at 10.3% during March 2015, when FIIs were double the number compared to the DIIs. In the last ten years, the Indian equity market flourished more due to its investors.
Asset Under Custody (AUC)
The asset under custody for Foreign Institutional Investors stood at ₹74.91 lakh crore in the December quarter compared to ₹81.88 lakh crore in the September quarter. This sharp decline shows the huge sell-off by FIIs during the quarter.
On the other hand, DIIs’ assets under custody stood at ₹73.47 lakh crore in the December quarter, which shows a nominal decline from the September quarter’s ₹ 76.78 lakh crore of AUC.
Primary – Secondary Market Investments
As per data of FII and DII ownership in the secondary market, in the December quarter of FY25, the FIIs sold Indian equities worth ₹1.56 lakh crore in the secondary market. On the other hand, they bought equities worth ₹55582 crore from the primary market. DIIs on the contrary, purchased equities worth ₹1.86 lakh crore during the same period.
Share Market Reaction
During the quarter, the Sensex and the Nifty 50, both the broad market equity indices fell significantly by 8.7% and 9.7% respectively.
Source: MoneyControl
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