Foreign investors have cut Indian equity holdings by about $53 billion since late 2024, leaving the market lagging emerging peers. As FIIs reduce risk, domestic institutions have stepped in and grown their ownership to a record 18.6%, helping “domesticate” market sentiment. Jefferies highlights seven stocks that could better withstand this FII pressure.
Retail investors sold equities worth Rs 13,000 crore, but Zerodha clients kept buying aggressively, pointing to a growing divergence within retail participation. The broader picture shows direct retail ownership declining even as mutual fund holdings hit record highs, suggesting investors are increasingly shifting toward professionally managed funds amid rising domestic institutional influence in India’s equity markets.
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Individual investors trimmed direct equity exposure for a third straight quarter, even as mutual fund holdings climbed to an all-time high. The shift was powered by strong retail inflows into MFs. At the same time, foreign ownership slid to a 14-year low amid risk-off sentiment, while domestic institutional holdings rose to a fresh peak.
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