Retail investors have significantly outperformed foreign institutional investors (FIIs) in 118 Nifty 500 stocks where FIIs reduced their stakes over the last two financial years. According to Business Standard reports, this trend reflects the growing retail participation in Indian stock markets, with registered demat accounts across depositories now reaching nearly 25 crore. G. Chokkalingam, Founder & Head of Research at Equinomics Research, notes that approximately 5-7 lakh new retail investors have been added per week to the capital market either directly or indirectly through mutual funds in the last two years.
The investment dynamics reveal stark contrasts between domestic and foreign participation. As reported by Business Standard, domestic institutional investors (DIIs) have invested over ₹10.44 lakh crore in equities in the last two financial years, while foreign institutional investors net sold stocks worth ₹3.27 lakh crore in the Indian market during April 2024 to March 2026. FIIs have been largely sellers due to valuation concerns following market peaks in September 2024, IPO boom shifts toward primary markets, and geopolitical uncertainties including US tariff wars and rupee depreciation. However, The Economic Times reports that domestic institutional investors have absorbed much of this selling pressure, with DII inflows crossing ₹4 lakh crore in calendar year 2026 alone.
Among the 118 stocks where retail investors increased holdings while FIIs reduced stakes, Kaynes Technology, Tejas Networks and Aditya Birla Fashion Retail emerged as the most bought stocks with retail holdings increasing by over 1,000 basis points of 10% each. According to Capitaline data compiled by Business Standard, Netweb Technologies India has been a standout gainer with 187% appreciation, while retail investors are still nursing losses in 5 out of the top 10 most stocks with losses up to 35%. The Economic Times notes that a handful of Nifty stocks have bucked the FII selling tide entirely, with Bharti Airtel seeing FII holding jump from 25.08% to 27.79% - a notable vote of confidence in the telecom consolidation story.
Of the 65 stocks where retail investors hold higher stakes compared to March 2024 levels, 22 stocks are down in the range of 30-55%. As reported by Business Standard, Bata India, Swan Corp, Birlasoft, Cyient and C.E. Info Systems are down more than 50% each, with other prominent laggards including ACC, IRCTC, IndusInd Bank, TCS, DLF, ITC and KEC International. The Economic Times reveals that the damage is concentrated at the very top, with 13 major companies bearing the brunt of the selling between September 2024 and March 2026. Trent leads the carnage as FII holding collapsed from 26.62% to 15.59%, with the stock falling 51% from its all-time high. Eternal (formerly Zomato) saw foreign ownership nearly halve from 52.53% to 32.61%, while TCS has shed nearly a quarter of its FII ownership to 9.66%.
Despite challenges, 26 stocks have delivered over 30% gains for retail investors over the last two fiscal years. According to Business Standard analysis, Netweb Technologies India, Mazagon Dock Shipbuilders, Syrma SGS Technology, Godfrey Phillips India and HFCL helped retail investors double their wealth. Other top performers include Shriram Finance, Data Patterns, Siemens, CDSL, Coforge, Bharat Dynamics, CAMS, Aurobindo Pharma and InterGlobe Aviation. The Economic Times reports that the ongoing correction is helping valuations normalise and improving the risk-reward equation for long-term investors. Market experts suggest that if nominal GDP growth is 10-11%, all large corporates will deliver commensurate returns, while for alpha, investors should look at mid- and small-caps. The steady FIIs outflows combined with addition of new retail investors has led to retail holdings increasing in select stocks versus FIIs, reflecting the evolving dynamics of Indian equity market participation.
