Domestic mutual fund ownership in NSE-listed companies reached a fresh record high of 11.4% in the March 2026 quarter, marking the eleventh consecutive quarter of record highs. According to market data from NSE Market Pulse, this sustained growth is primarily driven by strong systematic investment plan (SIP) inflows and consistent retail participation. The domestic institutional investor (DII) ownership overall rose to 19.6%, remaining above foreign portfolio investor (FPI) ownership for the sixth straight quarter - a reversal of historical trends last seen more than two decades ago. This marks a clear "domestication" of equity market risk, driven largely by sustained SIP inflows and persistent foreign outflows.
Foreign portfolio investor ownership in NSE-listed companies fell to a 17-year low of 15.8% in the March 2026 quarter, declining 90 basis points quarter-on-quarter. As reported by market data, the decline reflects continued selling pressure with fiscal year 2026 witnessing record net outflows of $19.6 billion, of which nearly 72% occurred in the March quarter alone. In value terms, FPI holdings dropped 17.9% quarter-on-quarter to ₹64.6 lakh crore as of March 31, 2026. At the index level, FPI ownership in the Nifty 50 and Nifty 500 declined to 21.8% and 16.8% respectively, marking near 14-year and 17-year lows. The data underscores a sustained reduction in foreign exposure across Indian equities amid global risk repricing, dollar strength, and shifting capital flows toward other emerging markets and AI-linked opportunities.
The SIP engine remained the key driver of domestic flows, with average monthly SIP inflows rising to ₹30,978 crore in the fourth quarter fiscal year 2026, up 3.3% quarter-on-quarter and 18.7% year-on-year. According to market data, for fiscal year 26, total mutual fund investments reached a record ₹5.37 lakh crore, marking the fifth consecutive year of net inflows and the 20th straight quarter of positive flows. This broad-based growth pushed domestic mutual fund ownership in the Nifty 50 and Nifty 500 to 14.0% and 11.9% respectively, both at all-time highs. The sustained growth reflects steady retail participation despite market volatility, with the SIP mechanism continuing to attract consistent investor interest across different market conditions.
Within the mutual fund universe, both active and passive ownership increased significantly, with active funds rising more sharply to 9.3% and passive funds reaching a record 2.1%. As reported by market data, this broad-based rise pushed domestic mutual fund ownership across all segments to record levels. The sustained growth in both active and passive funds underscores the diversified nature of domestic investor participation and the continued shift toward systematic investment approaches in Indian equity markets. This broad-based rise across all fund categories demonstrates the maturation of the Indian mutual fund industry and the growing sophistication of domestic investor preferences.
