Individual investors sold nearly ₹13,000 crore worth of direct equities between December 2025 and March 2026, while clients of Zerodha were net buyers by almost the same amount, according to co-founder Nithin Kamath. As reported by The Economic Times, Kamath noted that the bigger trend shows direct retail ownership has been flat to declining, with all retail participation now occurring through mutual funds. This divergence highlights the growing maturity of individual investors who are increasingly preferring professionally managed investments over direct stock picking.
According to a report by Prime Infobase, the combined shareholding of individual investors in NSE-listed companies fell to a five-year low of 9.11% in the March 2026 quarter, down from 9.28% in December 2025. In stark contrast, domestic mutual funds raised their holdings to an all-time high of 11.46%, marking the eleventh consecutive quarter of growth. As reported by The Economic Times, this shift represents a fundamental change in how Indian retail investors approach equity markets, with professional fund management becoming the preferred investment vehicle.
The data reveals a dramatic transformation in Indian equity ownership patterns over the past decade. According to Prime Infobase, in March 2012, mutual funds held just 3.21% of listed Indian equities compared with 8.51% held directly by individuals. Fourteen years later, direct retail ownership has remained broadly flat at 9.11%, while mutual fund ownership has surged to 11.46%, overtaking individual investors and moving closer to foreign institutional ownership. This shift has been accelerated by global geopolitical uncertainty and volatile foreign flows over the past 18 months.
Foreign institutional investors now hold just 16.13% of Indian equities, representing a 14-year low amid sustained global risk-off sentiment and geopolitical tensions. As reported by The Economic Times, the gap between FII and mutual fund ownership has narrowed significantly to just 4.67 percentage points, compared with 17.14 percentage points in 2015. Domestic institutional ownership, including mutual funds, insurance companies, banks and alternative investment funds, reached another all-time high of 19.24% in the March quarter, reinforcing what market participants describe as India's 'atmanirbhar' ownership model.
The trend is supported by strong systematic investment plan performance, with gross SIP inflows now hovering near record levels of ₹32,000 crore. According to Prime Infobase, domestic institutional investors are increasingly becoming the market's biggest stabilisers as retail money flows in through systematic investment plans. This sustained growth in SIP investments has helped domestic institutions absorb selling from foreign funds, demonstrating the resilience of India's domestic investment ecosystem.
