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FIIs vs DIIs: Reversing roles in India's equity market after 25 years

With enough firepower to counter FIIs, DIIs have made India's equity market more resilient, but what's driving the shift?

DIIs, FPIs, NSE-listed firms, March 2025 shareholding, Prime Database, mutual funds ownership, insurance companies investment, foreign investors, domestic equity market, Indian stock market
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UTI, which was by far the largest mutual fund at the time, faced serious problems in its assured-return schemes in 1998. | Illustration: Binay Sinha

Janak Raj Mumbai

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In 1992, foreign institutional investors (FIIs), or foreign portfolio investors, were allowed to participate in the Indian equity market, marking a major step in opening the Indian capital market to foreign investment. FIIs began their operations with a modest investment of ₹13 crore in 1992-93. At that time, domestic institutional investors (DIIs), comprising the erstwhile Unit Trust of India (UTI), six bank-sponsored mutual funds, and four financial institution-sponsored mutual funds, were well-established. In 1993, private-sector mutual funds were also allowed, which, along with the mutual funds already in operation, were expected to act as a counterweight to FIIs. The combined
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