Data showed domestic institutions held around 24.8 percent of the Nifty50.
Foreign institutional investors held about 24.3 percent during the same period.
The data reflects holdings as of the December 2025 quarter.
Analysts said foreign investor ownership has fallen to an eight-quarter low.
They attributed the change to strengthening domestic capital participation.
Market experts described the trend as structural rather than cyclical.
Domestic investors had earlier overtaken foreign investors in overall equity ownership.
However, they continued trailing FIIs within the Nifty50 until the latest quarter.
The December data marked a decisive shift in benchmark index ownership.
Analysts attributed the change to sustained domestic inflows into equity markets.
Strong systematic investment plan inflows supported this trend.
SIP investments reached approximately Rs 3.34 lakh crore during 2025.
Rising participation from pension funds also supported domestic ownership growth.
New asset management companies further expanded domestic institutional participation.
These factors contributed to consistent long-term capital inflows.
Steady investments from large institutions strengthened market stability.
The Employees’ Provident Fund Organisation continued equity allocations.
Insurance companies also maintained regular investments in equity markets.
Market observers said domestic flows could cushion market volatility.
They expect domestic investments to moderate during corrections.
Analysts do not expect a complete reversal of domestic participation.
Over the past five years, domestic inflows supported market performance.
This occurred despite significant foreign investor selling.
Foreign investors cumulatively sold nearly Rs 9.96 lakh crore in equities.
Brokerage data showed a steady decline in foreign ownership.
FII holdings in the Nifty50 declined by 90 basis points year-on-year.
They fell by 20 basis points quarter-on-quarter.
Domestic institutional ownership increased meaningfully over the same period.
Holdings rose by 170 basis points year-on-year.
They increased by 30 basis points on a sequential basis.
Foreign investors reduced stakes in most Nifty50 companies.
They cut holdings in about 78 percent of index constituents.
Domestic institutions raised holdings in nearly 82 percent of Nifty50 stocks.
In value terms, domestic institutional assets reached notable levels.
Assets under custody stood at approximately $24.8 billion.
Foreign holdings stood slightly lower at around $24.3 billion.
Market performance in 2025 reflected mixed trends.
The Nifty50 gained about 10 percent during the year.
This occurred despite heavy domestic institutional investments.
Domestic institutions invested Rs 7.44 lakh crore in equities during 2025.
This far exceeded total foreign investor selling of Rs 1.66 lakh crore.
Analysts attributed modest returns to weak earnings growth.
Elevated valuations also weighed on market performance.
Market participants continue tracking potential positive triggers.
Analysts cited a possible India-US trade deal as one catalyst.
They said improved global sentiment could revive foreign investor interest.
Such developments may lead to renewed FII inflows into Indian equities.
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