THE GREAT MARKET SHIFT: EVEN AS FOREIGN PORTFOLIO INVESTORS TURN NET SELLERS, DOMESTIC INVESTORS ARE TAKING CHARGE ON D-STREET.

FOR YEARS, foreign portfolio investors (FPIs) were the pacesetters for Indian equities. A single sell order from Singapore or New York would send shivers down D-Street. But the balance of power is shifting. Today, even as FPIs withdraw billions, the stock market is holding its ground, courtesy of an army of domestic investors who are rewriting the rules of the game with steady inflows.

- BY CHITRANJAN KUMAR

Between FY22 and FY25, FPIs offloaded shares worth nearly ₹96,500 crore, turning net sellers in three of the past four years. Year-to-date (till August 22), they've sold another ₹1.96 lakh crore worth of shares, including ₹22,217 crore in August alone. Yet, the Nifty50 has gained more than 5% this year. Meanwhile, on strong macro indicators, expectations of GST rationalisation, and an upgrade in India's sovereign credit rating by S&P, domestic institutional investors (DIIs) have pumped in ₹4.85 lakh crore so far this year.

Behind this domestic wave lies retail participation. “In the past four years, despite heavy FPI selling, the Nifty50 delivered absolute returns of 54%,” says Sunny Agrawal, head of fundamental equity research at SBI Securities. Ajit Mishra, SVP-research at Religare Broking, attributes this change in market dynamics to “the financialisation of household savings”.