It’s a DII Street This Oct: FIIs meet their match in local funds
Dalal Street presented a study in sharp contrasts — and lofty records. First, foreign investors pulled Rs 1 lakh crore out of Indian equities in October, beating the record in the Covid-ravaged March of 2020 with consummate ease. Yet, the fall in equity gauges was nowhere as devastating as in that month, with domestic funds more than matching the sales momentum through record purchases. In the bargain, domestic institutional investors (DII) may have, for the first time this millennium, pulled ahead of overseas funds in owning locally listed firms — another record that points to the shifting centre of gravity in the ownership of Indian risk assets.
To be sure, detailed ownership data for October-December will be published in January. Yet, by September end itself, the ownership gap between foreign institutional investors (FII) and DIIs had narrowed to a record low of 109 bps, underscoring the growing influence of domestic capital in Indian equities. “There has been a dramatic shift in ownership in Indian capital markets over past few quarters, with local investors taking the lead and FIIs losing influence,” said Pranav Haldea, MD, Prime Database Group.
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“In the past, when FIIs sold, the market would collapse, and LIC and other domestic institutions would step in to prevent further damage. Now, things have changed,” Haldea said.
While the share of FIIs in NSE-listed companies rose to 17.55% at the end of September from 17.39% in the quarter ended June, the ownership of DIIs reached a record high of
