DII inflows hit record ₹8.5 lakh crore in FY26, dwarfing FPI outflows: SEBI
Synopsis
For the first time, domestic institutional investors have decisively outmuscled foreign portfolio investors in India's equity markets — pumping in ₹8.5 lakh crore against FPI outflows of ₹1.8 lakh crore in FY26. With DII ownership at a record 17% and FPI share at a 15-year low, India's market structure may be undergoing a lasting shift away from foreign-flow dependence.
Key Takeaways
DIIs recorded a record ₹8.5 lakh crore in net equity inflows in FY26 , per SEBI's annual report.
FPI equity outflows stood at ₹1.8 lakh crore ; DII inflows more than offset the exit.
DII ownership in the NSE -listed universe hit an all-time high of 17% ; FPI ownership fell to a 15-year low of 15.8% .
Mutual funds contributed ₹6.4 lakh crore , driven by steady SIP flows and rising retail participation.
Demat accounts rose to 22.5 crore ; corporate equity fundraising hit a record ₹2.35 lakh crore , up 11.7% year-on-year.
Share buybacks surged 143.6% to ₹19,238 crore ; rights issue capital jumped 134.2% to ₹46,168 crore .
Domestic institutional investors (DIIs) pumped a record ₹8.5 lakh crore into India's equity markets in FY26, more than quadrupling the foreign portfolio investor (FPI) equity outflows of ₹1.8 lakh crore, according to the latest annual report of the Securities and Exchange Board of India (SEBI). The surge in domestic flows pushed DII ownership in the NSE-listed universe to an all-time high of 17%, while FPI ownership slipped to a 15-year low of 15.8%.
Mutual Funds and SIPs Power Domestic Surge
Mutual funds were the dominant engine of domestic inflows, contributing approximately ₹6.4 lakh crore — roughly three-quarters of total DII flows. Steady systematic investment plan (SIP) contributions and rising retail participation underpinned the surge. The number of demat accounts climbed to 22.5 crore during the year, reflecting broader investor participation aided by digital onboarding and easier market access.
Record Capital Raising Across Equity Segments
Corporate India raised a record ₹2.35 lakh crore through public equity offerings — including initial public offerings (IPOs), follow-on public offers (FPOs), and rights issues — an increase of 11.7% over the previous fiscal year. A record 257 companies tapped SME platforms during FY26, mobilising ₹11,587 crore. Capital raised through rights issues surged 134.2% to ₹46,168 crore, while funds mobilised through preferential allotments rose 76.3% to ₹1.48 lakh crore.
Buybacks and Debt Markets Also Strengthen
Share buybacks jumped 143.6% to ₹19,238 crore, with companies utilising nearly their entire offer sizes — a signal of corporate confidence in valuations. The debt market also recorded robust activity, with resource mobilisation through public debt issues rising 39.2% to ₹11,343 crore. This comes amid a broader trend of Indian companies diversifying their fundraising avenues beyond traditional bank credit.
What SEBI Says About Market Stability
SEBI noted that stronger domestic participation, rising retail ownership, and diversified fundraising channels have contributed to a broader and more stable market ecosystem — even as foreign investors remained net sellers throughout the year. According to the regulator, domestic savings are increasingly cushioning Indian markets from the volatility of global capital flows, marking a structural shift in how India's equity markets are supported.
The data underscores a deepening of India's capital markets, with domestic institutional money now serving as a reliable counterweight to FPI behaviour — a dynamic that analysts say could reduce India's vulnerability to global risk-off episodes going forward.
Point of View
But the more consequential signal is structural: for the first time, domestic money is large enough to set market direction, not just soften foreign selling. The SIP culture, once a retail finance story, has become a macro stabiliser. Yet this cuts both ways — if SIP redemptions ever spike during a domestic shock, the cushion could become a source of amplified volatility. SEBI's report celebrates the depth; the stress-test of that depth remains untested.
NationPress
7 Aug 2026
Frequently Asked Questions
What does the SEBI FY26 report say about DII inflows?
SEBI's FY26 annual report shows that domestic institutional investors recorded a record net inflow of ₹8.5 lakh crore into Indian equity markets, more than offsetting FPI equity outflows of ₹1.8 lakh crore. DII ownership in the NSE-listed universe consequently rose to an all-time high of 17%.
Why did FPI ownership fall to a 15-year low in FY26?
Foreign portfolio investors were net sellers in Indian equities throughout FY26, recording outflows of ₹1.8 lakh crore. This, combined with surging domestic inflows, pushed FPI ownership down to 15.8% — its lowest level in 15 years — while DII ownership climbed to a record 17%.
How much did mutual funds contribute to DII inflows in FY26?
Mutual funds contributed approximately ₹6.4 lakh crore of the total ₹8.5 lakh crore in DII inflows, supported by consistent SIP flows and growing retail participation. The number of demat accounts also rose to 22.5 crore during the year.
How much did Indian companies raise through equity markets in FY26?
Corporate India raised a record ₹2.35 lakh crore through public equity offerings — including IPOs, FPOs, and rights issues — an 11.7% increase over the previous fiscal year. Rights issue fundraising alone surged 134.2% to ₹46,168 crore.
What does the DII-FPI ownership shift mean for Indian markets?
According to SEBI, the growing dominance of domestic institutional money means Indian markets are increasingly cushioned from global capital flow volatility. The regulator views stronger domestic participation, rising retail ownership, and diversified fundraising as contributors to a more stable and mature market ecosystem.
