Domestic Investors Power Indian Markets as Record DII Inflows Offset Foreign Selling: SEBI

New Delhi: Domestic institutional investors (DIIs) emerged as the driving force behind India's equity markets in FY26, pumping in a record Rs 8.5 lakh crore and comfortably offsetting foreign portfolio investor (FPI) outflows of Rs 1.8 lakh crore, according to the latest annual report released by the Securities and Exchange Board of India (SEBI).

The surge in domestic investments pushed DII ownership in NSE-listed companies to an all-time high of 17 per cent, while FPI ownership declined to a 15-year low of 15.8 per cent, highlighting a significant shift in the market's ownership pattern.

Mutual funds accounted for the bulk of the domestic inflows, contributing around Rs 6.4 lakh crore. The sustained momentum was driven by strong systematic investment plan (SIP) inflows and growing participation from retail investors.

India's investor base also continued to expand during the fiscal year, with the number of demat accounts rising to 22.5 crore, reflecting wider market participation aided by digital onboarding and easier access to investing platforms.

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SEBI's report highlighted the increasing depth of India's capital markets, with companies raising a record Rs 2.35 lakh crore through public equity offerings, including initial public offerings (IPOs), follow-on public offers (FPOs) and rights issues. This marked an 11.7 per cent increase over the previous financial year.

The SME segment also witnessed robust activity, with a record 257 companies raising Rs 11,587 crore through SME platforms during FY26.

Capital mobilisation through rights issues surged 134.2 per cent to Rs 46,168 crore, while funds raised through preferential allotments climbed 76.3 per cent to Rs 1.48 lakh crore. Share buybacks also gathered pace, rising 143.6 per cent to Rs 19,238 crore as companies utilised nearly their entire approved offer sizes.

The debt market recorded healthy growth as well, with funds mobilised through public debt issuances increasing 39.2 per cent to Rs 11,343 crore.

According to SEBI, the strong participation of domestic investors, expanding retail ownership and multiple fundraising avenues have made India's capital markets more resilient, enabling them to withstand persistent foreign selling while maintaining overall market stability.
 

With inputs from IANS