Rs 6 trillion & counting: DIIs pump record money in Indian stocks in 2025

The strong domestic flow, meanwhile, offset the selling by foreign portfolio investors (FPIs) during CY25, who pulled out $23.3 billion (Rs 2.03 trillion) from the domestic equity markets.

Domestic institutional investors’ (DIIs) flows to the equity segment were robust in calendar year 2025 (CY25) as their net investments hit Rs 6 trillion, the highest in a calendar year since BSE started maintaining data in 2007.

 

The net inflow includes investments by banks, domestic financial institutions, insurance companies, new pension schemes and mutual funds, and it is higher than the Rs 5.26 trillion they put in Indian stock markets in CY24, BSE data shows.

 

Rishi Kohli, chief investment officer at Jio BlackRock AMC, expects the momentum to continue due to mutual fund (MF) systematic investment plans (SIP), which are resilient even as markets decline. “Unless there’s a global shock causing a 30–40 per cent correction, DIIs should keep investing strongly. I will not be surprised if DII flows surpass the 2025 levels in CY26,” he said.

 

 

The strong domestic flow offset selling by foreign portfolio investors (FPIs), who pulled out $23.3 billion (Rs 2.03 trillion) from domestic equity markets in CY25, according to data from National Securities Depository Limited. FPIs pumped in $5,716 million (Rs 49,590 crore) through the primary market and other routes in CY25. 

 

The United States (US), China, Germany and Brazil are the “most crowded trades” for FPIs, said Mahesh Patil, chief investment officer, Aditya Birla Sun Life AMC. “These are the markets which have seen the highest relative inflows and consequently better overall market returns. On the other hand, countries which have seen outflows by global investors are Japan, India, Vietnam and South Korea.”

 

Since the Lehman Brothers crisis in 2008, DIIs have made substantial profits by buying aggressively whenever the Indian markets tanked and FIIs sold heavily, according to G Chokkalingam, founder and head of research at Equinomics Research.

 

A cycle of ups and downs in the domestic market has worked consistently for DIIs in the past 17 years, he said. Panic selling has proven to be a mistake for FIIs, while supporting the markets at such instances has been beneficial for DIIs.

 

“Going forward, I expect their [DIIs] net investment into equities to remain robust as flows into insurance and pension funds continue to grow. However, the scale at which they are buying may not continue, as the market is at near record highs and retail flows into MFs are likely to moderate,” Chokkalingam said.

 

Show of strength

 

DIIs’ record investment has kept the equity markets resilient despite the US imposing 50 per cent tariffs on India.

 

In CY25, the BSE Sensex and Nifty50 index are up 5.8 per cent and 4.4 per cent, respectively. However, the BSE Smallcap index tanked 5.6 per cent, while BSE Midcap index is down 1.6 per cent so far in CY25, data shows.

 

DIIs increased investments in BFSI, capital goods, healthcare and the automobile industry in CY25, said Patil.

 

Domestic investors’ dominance in Indian equities — through mutual funds and SIPs — will continue for the medium term and provide resilience against foreign outflows, said Sonam Udasi, senior fund manager at Tata Asset Management.

 

“Monthly domestic inflows of over Rs 25,000 crore demonstrate the deepening local investor base. If tariff concerns abate, global investors could eventually play catch-up,” Udasi said.