Domestic investors buy record Rs 5.3 lakh crore worth equities in 2025 to date, beat 2024 total
Indian investors are pouring money into the stock market like never before. With just a quarter of 2025 left, domestic institutional investors (DIIs) have already snapped up a record Rs 5.3 lakh crore worth of equities. That’s more than the entire Rs 5.22 lakh crore they bought throughout 2024, based on latest stock exchange figures.
Mutual funds led the charge, grabbing Rs 3.65 lakh crore in investments. Strong monthly inflows from systematic investment plans (SIPs) topped Rs 25,000 crore, even as funds kept hefty cash reserves of Rs 1.98 lakh crore in August. Insurance companies and pension funds chipped in over Rs 1 lakh crore, with portfolio managers, alternative funds, banks, and others filling out the rest.
But experts warn the buying frenzy might be cooling off. Market returns have flatlined, and global challenges are dampening spirits. Indian stocks are underperforming compared to international rivals— the Sensex rose just 2 percent and the Nifty 4 percent in dollar terms this year so far. That’s a far cry from the double-digit gains in major Asian and Western markets.
Questions swirl around whether mutual fund inflows can keep up the pace. Equity funds pulled in Rs 33,430 crore in August and a whopping Rs 42,702 crore in July. Yet, investors are cashing out from small-cap and thematic funds, shifting cash to booming real estate. Add in potential GST changes and festive season spending on things like home makeovers, and household savings could take a hit. As India’s consumption boom heats up, that might mean less fresh money flowing into stocks.
On the flip side, foreign institutional investors (FIIs) continue to pull back. They’ve dumped a net Rs 1.80 lakh crore in Indian equities this year, building on last year’s Rs 1.21 lakh crore sell-off. Interestingly, FIIs keep buying through initial public offerings (IPOs) and the primary market, even as they offload shares on exchanges. In September alone, they picked up Rs 1,559 crore worth.
Challenges like weak corporate earnings, high stock valuations, and worries over U.S. tariffs are holding FIIs at bay for now. Still, analysts spot hope on the horizon. They expect corporate profits to jump more than 15 percent in fiscal year 2027, which could flip foreign investor moods and spark a stock market rebound.
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