DII equity inflows top Rs 5 trillion for third straight calendar year

Within the Nifty-500, DIIs were overweight in Consumer, public sector undertaking (PSU) Banks, Oil & Gas, Telecom, Metals, and Technology sectors in the June 2026 quarter, reports suggest.

Domestic Institutional Investors’ (DIIs’) net investment in the equity segment crossed Rs 5 trillion for the third straight calendar year in 2026.

 

DIIs, which include banks, domestic financial institutions (DFIs), insurance companies, new pension schemes and mutual funds, made a net investment of Rs 5.13 trillion in equities till August 7, stock exchange data shows. During the same period in CY25, they had invested Rs 4.48 trillion.

 

In all of CY25, they pumped in Rs 7.88 trillion and recorded a net inflow of Rs 5.26 trillion into the Indian stock market in CY24, BSE data shows. 

 

Over the last 36 months since August 2023, DIIs have pumped in Rs 19.21 trillion into Indian equities. In contrast, foreign portfolio investors (FPIs) sold Rs 10 trillion worth of Indian stocks during the same period.

 

Analysts attribute the strong DII flows, especially in the last few months, to the underlying strength of the Indian economy despite geopolitical developments in West Asia.

  “GST (goods & services tax) collections have been good over the last few months. There have been no major negative surprises on the economic front as well despite the West Asia war. That apart, flows into equity and balanced schemes for mutual funds have been robust. This money got deployed into the markets. Overall, DII flows are expected to be strong in the months ahead,” said U R Bhat, co-founder & director, Alphaniti Fintech.

 

 

 

The combination of easing geopolitical risks, moderating energy prices, improving corporate earnings, and a meaningful correction in valuations from CY24 peaks has materially enhanced the market's risk-reward profile, suggested analysts at Motilal Oswal Financial Services in a recent note. With the FII flows turning positive after four months of record selling, they expect the market sentiment to remain mostly positive for Indian equities.

 

Sector watch

 

Within the Nifty-500, DIIs were overweight in Consumer, public sector undertaking (PSU) Banks, Oil & Gas, Telecom, Metals, and Technology sectors in the June 2026 quarter, while they were underweight on Private Banks, NBFCs, Capital Goods, Chemicals, Real Estate, Healthcare, and Automobiles, the MOFSL note said. 

 

DII ownership in the Indian markets, according to Elara Capital, has increased steadily in the past 12 quarters and remains near peak levels, with the Nifty 50 at 25.5 per cent, the NSE Midcap 150 at 17.1 per cent, the NSE Smallcap 250 at 15.6 per cent, and the NSE 500 at 20 per cent. 

 

“Domestic investors have consistently added across large, mid, and small-caps. On a quarter-on-quarter (QoQ) basis, higher additions are in auto, banks, cement, chemicals, consumer discretionary, financials, healthcare, real estate, sugar and transport. Minor decline is visible in energy, FMCG, industrials, media, metals, textiles, and utilities,” the Elara report suggests.

 

For DIIs, the top 5 stocks by holding value in the June 2026 quarter, according to analysts at Motilal Oswal included HDFC Bank ($47.2 billion), ICICI Bank ($44.3 billion), Reliance Industries ($38.9 billion), ITC ($27.4 billion), and State Bank of India ($26.5 billion). "These five stocks contribute 20 per cent to the overall holding value of DIIs," the MOFSL note said.