Big shifts are unfolding in India’s stock market as foreign investors reduce their stakes while domestic players take charge. Let’s break down the latest ownership trends from the December 2024 disclosures.
| Company | Value | Change | %Change |
|---|
There was a significant exodus of Foreign Portfolio Investors (FPIs), with a staggering $12 billion flowing out of India in the fourth quarter of 2024. Their ownership in the top 500 NSE-listed companies dropped to 18.8%, marking a 12-year low. However, going by the disclosures, it becomes apparent that FPIs are not exiting entirely — they are reallocating their investments.While their stake in Nifty 50 declined, they have been increasing their exposure to midcap and small-cap stocks. Their midcap holdings rose by 45 basis points (bps) year-on-year, while small-cap allocations climbed 60 bps.
FII ownership trends
| FII Stake | Nifty 50 | Midcap 100 | Small Caps |
|---|---|---|---|
| Dec 2023 | 25.8% | 15.8% | 11.9% |
| Dec 2024 | 24.3% | 16.2% | 12.5% |
Source: DAM CapitalDIIs strengthen their grip on the market
Domestic Institutional Investors (DIIs) have stepped up, hitting a record ownership of 17.9% across the top 500 companies. Mutual funds, a key segment of DIIs, crossed 10.7% for the first time, marking a major milestone.
DIIs have increased their holdings across all market segments, with Nifty 50 seeing a over 200-bps jump YoY, midcaps gaining 100 bps, and small caps rising 70 bps in the December quarter.
DII ownership trends
| DII Stake | Nifty 50 | Midcap 100 | Small Caps |
| Dec 2023 | 19.8% | 16% | 12.1% |
| Dec 2024 | 21.9% | 17% | 12.8% |
Source: DAM CapitalRetail investors steady, but small caps gain favour
Retail investors have maintained a steady presence, with their overall shareholding holding firm at 8.8%. However, they are showing a growing preference for small-cap stocks.
Their exposure to small caps increased by around 20 bps to 9.4% in the December quarter, while their holdings in Nifty 50 and midcaps remained largely unchanged at 6.9% and 9.7%, respectively.
The big picture: A shifting market landscape
The latest ownership trends highlight a changing market dynamic: FPIs are reducing their footprint in large caps but increasing mid and small-cap allocations. Meanwhile, DIIs are consolidating their position with record-high stakes, and retail investors are making strategic moves into small caps.
As foreign money shifts, domestic players are taking the lead — reshaping the future of India’s stock market. Will this trend persist in 2025? Market watchers will be keeping a close eye.
