PFB the Market Perspective on DIIs overtaking FIIs in the Indian equities ownership from Mr. Gaurav Bhandari, CEO of Monarch Networth Capital
Below the PFB the Market Perspective on DIIs overtaking FIIs in the Indian equities ownership from Mr. Gaurav Bhandari, CEO of Monarch Networth Capital
“DII ownership overtaking FIIs in the Nifty50 is primarily a structural shift, though accelerated by cyclical global risk off sentiment. Over the last few years, domestic institutions , driven by SIP-led mutual fund inflows, insurance allocations and retirement savings have become a permanent and predictable source of capital. While global risk aversion has temporarily reduced FII participation, the fact that DIIs are now dominant even in the most liquid and widely tracked index reflects a deepening of India’s domestic capital base, not just a short-term anomaly. ”On the sustainability of DII dominance in the event of market correction/slowdown of inflows, Mr Bhandari says “DII dominance is largely sustainable, but not unconditional. Even in a market correction, domestic flows are likely to moderate rather than reverse, given the long-term nature of SIPs, EPFO, and insurance allocations. That said, if retail inflows were to slow materially, DIIs would become more valuation sensitive and selective. In such a scenario, DIIs would cushion downside but not aggressively chase prices, leading to consolidation rather than sharp drawdowns.”
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