Domestic investors pour ₹5 trillion into equities in 2025
What's the story
Domestic institutional investors (DIIs) have made a massive investment of over ₹5 lakh crore in Indian equities in 2025. The investment marks the second consecutive year that DIIs have hit this milestone, according to provisional data from the National Stock Exchange(NSE). Mutual funds, banks, insurers, and other domestic institutions have net bought equities worth ₹5.13 lakh crore so far this year. This is after a record ₹5.25 lakh crore was invested in 2024.
Market dynamics
FIIs exodus contrasts with DII inflows
The surge in domestic buying comes amid a relentless sell-off by foreign institutional investors (FIIs). This year alone, FIIs have pulled out over ₹1.6 lakh crore from the secondary market after withdrawing nearly ₹1.21 lakh crore in 2024. Despite heavy promoter offloads and profit-booking by private equity funds, DII inflows have played a crucial role in absorbing this selling pressure.
Market performance
Sensex, Nifty up marginally in 2025 so far
Despite the strong domestic flows, the Indian equities market has remained volatile in 2025. The Sensex is up 2.1% and Nifty by 3.1%, while BSE MidCap index has fallen 3.9% and SmallCap index by 6.8%. A Bloomberg note revealed that only 30% of BSE500 companies have given positive returns in the last year, with a whopping 70% ending lower—indicating liquidity alone cannot ensure market breadth.
Future outlook
Analysts see structural shift in domestic equity participation
Despite the current volatility, analysts are optimistic about a structural shift. Independent market expert Ajay Bagga noted that domestic participation in equities is steadily rising as higher incomes and growing investment appetite create a self-reinforcing cycle. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said the market's resilience at current levels is largely due to DII flows—reflecting a longer-term trend of household savings moving into equity investments.