For the first time, India’s mutual funds and insurers now control more equity market wealth than foreign portfolio investors, a power shift fueled by relentless retail inflows despite a turbulent year for stocks.
As of July 2025, mutual funds and insurance companies together held ₹72.67 lakh crore in equity assets under custody, edging past the ₹71.96 lakh crore managed by foreign portfolio investors (FPIs), NSDL data shows.
This marks a watershed moment for Indian markets. Over the past 12 months, domestic institutional equity holdings have surged by ₹4.17 lakh crore, while FPIs’ holdings have fallen by over ₹2.6 lakh crore. Mutual funds drove most of the rise, adding ₹5.13 lakh crore, while insurers saw a drop of ₹96,567 crore.
What makes the shift more striking is that it comes despite a ₹15 lakh crore erosion in the market value of large-cap stocks over the same period. Retail investors, funnelling savings into equity mutual funds and equity-linked insurance products, have kept flows strong month after month.
In July alone, equity growth schemes attracted ₹42,702 crore in net inflows, with hybrid schemes pulling in another ₹20,879.5 crore.
SIP momentum has been a major driver: gross monthly SIP flows hit a record ₹28,464 crore in July. FY25 saw total SIP inflows of ₹2.89 lakh crore, and the first four months of FY26 have already brought in ₹1.09 lakh crore. SIP assets under management climbed to ₹15.19 lakh crore at the end of July, up from ₹13.09 lakh crore a year earlier.
Tax incentives announced in the 2025 budget have added around ₹9,000 crore in disposable income for salaried employees, much of which has flowed into equities, reinforcing the dominance of domestic capital.
With retail-driven domestic institutions now outweighing foreign investors in India’s equity market, market watchers say the balance of power in driving stock prices may have permanently shifted.
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