Who's in control of India Inc? Mutual Funds thrive as FPIs face 15-yr slump

Domestic mutual funds extended their record-breaking run, with ownership climbing to an all-time high of 10.9 per cent (Active: 9.0 per cent, Passive: 1.0 per cent).

Domestic mutual funds (DMFs) have continued their record-breaking run in equity ownership even as foreign portfolio investors (FPIs) saw their share in Indian listed companies fall to the lowest level in more than 15 years, according to the India Ownership Tracker (Q2 FY26 | Vol. 7, Issue 2) released by the National Stock Exchange (NSE).

 

The September 2025 edition of the NSE’s flagship quarterly report presents a detailed analysis of ownership trends across NSE-listed companies, investor behaviour, and the evolving structure of household equity wealth. It also examines portfolio concentration across investor segments, offering insights into diversification and allocation patterns.

Promoters hold steady

Promoter holdings remained largely unchanged at 50.1 per cent for NSE-listed companies and 49.3 per cent for Nifty 500 firms as of September 2025. Within the Nifty 50, however, promoter ownership fell for the sixth consecutive quarter to a 23-year low of 40 per cent, the NSE data showed.

FPIs at multi-year lows

FPI ownership in NSE-listed companies declined to 16.9 per cent, marking the lowest level in over 15 years amid continued outflows. “The Nifty 50 and Nifty 500 also saw FPI stakes slip to 24.1 per cent and 18 per cent, respectively — both at 13-year lows,” the NSE said in the report.

 

The decline, according to the exchange, reflects sustained foreign outflows and portfolio rebalancing away from emerging markets. FPIs maintained an overweight stance on Financials, turned positive on Communication Services, and remained cautious on Consumption and commodity-linked sectors such as Energy, Materials, and Consumer Staples. They stayed underweight on Industrials, the report added.

Domestic mutual funds extend record streak

In contrast, DMFs extended their record-breaking run, with ownership climbing to an all-time high of 10.9 per cent (Active: 9.0 per cent, Passive: 1.0 per cent). This marked their ninth consecutive quarter of new highs.

 

“Supported by strong SIP inflows and consistent equity buying, domestic institutional investors (DIIs) outpaced FPIs for the fourth consecutive quarter — a trend last seen in 2003 — with the gap continuing to widen,” the NSE report said.

 

DMFs stayed overweight on large-cap Financials and mid-tier Consumer Discretionary, turned bearish on Consumer Staples, and maintained a negative stance on commodity sectors such as Energy and Materials.

Individual investors’ share holds firm

Direct equity ownership by individual investors held steady at 9.6 per cent. Combined with mutual fund exposure, individual investors now control 18.75 per cent of the market — the highest in 22 years, the NSE report noted.

 

Household wealth, portfolio concentration

Household equity wealth declined by about ₹2.6 lakh crore in Q2FY26. However, cumulative gains since April 2020 remain strong at approximately ₹53 lakh crore. Total household holdings stand at around ₹84 lakh crore, reflecting a five-year compound annual growth rate (CAGR) of 29.8 per cent and a 10-year CAGR of 21.1 per cent.

 

The share of Nifty 50 and top-decile companies in institutional portfolios increased in Q2FY26, signalling a flight to stability amid market uncertainty, even as the breadth of holdings expanded, the report added.