Domestic institutional investors now hold a bigger share of Indian equities than foreign institutional investors for the first time in more than a decade and select sectors are showing a distinct shift in ownership patterns. This is according to JM Financial’s latest report.
In its latest strategy report on ownership trends, JM Financial said DII ownership in Indian equities rose to 18.6% in FY26 from 10.2% in FY14, while FII ownership declined to 15.2% from 19.3% during the same period. The brokerage firm said promoter ownership also slipped to a 12-year low of 50% in FY26.
“The crossover highlights a structural shift in market ownership towards domestic pools of capital,” JM Financial said in the report.
According to JM Financial, this ownership shift is being driven by sustained SIP inflows, rising household participation and a steady move away from information technology stocks toward capital goods, pharma and domestic cyclical sectors.
| Trend | FY14 | FY21 | FY26 | Direction |
| DII ownership (overall equities) | 10.20% | — | 18.60% | ⬆ Strong rise |
| FII ownership (overall equities) | 19.30% | — | 15.20% | ⬇ Decline |
| Promoter ownership | — | — | 50% (12Y low) | ⬇ Decline |
JM Financial highlights FII allocation to IT slips to 6.3% in FY26
The report showed institutional money moving aggressively into capital goods, pharma and financials, while both foreign and domestic institutions reduced exposure to information technology services over the last decade.
JM Financial said FII allocation to IT services fell sharply to 6.3% in FY26 from 15.6% in FY14, while DII allocation to the sector dropped to 8.1% from the FY21 peak of 11.9%.
At the same time, DII allocation to banking, financial services and insurance rose to 27.8% in FY26 from 19.2% in FY14, while FII exposure to BFSI stood at 30.5%.
JM Financial also said DII allocation to pharma increased to 7.1% in FY26 from 4.5% in FY14, while FII allocation to capital goods rose to 6.6% from 6.2% during the same period.
Sector Allocation Shift
| Sector | FIIs FY14 | FIIs FY26 | DIIs FY14 | DIIs FY21 | DIIs FY26 | Key Takeaway |
| IT Services | 15.60% | 6.30% | — | 11.90% | 8.10% | 🚨 Big exit from IT |
| BFSI | — | 30.50% | 19.20% | — | 27.80% | 🏦 Biggest institutional bet |
| Pharma | — | — | 4.50% | — | 7.10% | 💊 Defensive growth theme |
| Capital Goods | 6.20% | 6.60% | — | — | — | 🏗 Manufacturing push |
IT services lose favour with both FIIs and DIIs
JM Financial said information technology services witnessed one of the sharpest reductions in institutional allocation over the last decade.
The brokerage firm said FII ownership in IT services fell by more than 900 basis points between FY14 and FY26 as overseas funds reduced exposure to export-heavy technology companies.
DII allocation to the sector also moderated steadily after peaking during the post-pandemic rally period.
The report showed DII exposure to IT services dropped to 8.1% in FY26 from 11.9% in FY21. FII allocation to the sector fell even more sharply to 6.3% from 15.6% over the same period tracked in the report.
JM Financial said the sectoral allocation trend indicates institutional money has increasingly moved toward domestic-facing sectors linked to manufacturing, financialisation and healthcare demand.
Capital goods and pharma emerge as institutional favourites
JM Financial said capital goods and pharma emerged among the biggest beneficiaries of changing institutional allocations.
The brokerage firm said both DIIs and FIIs increased exposure to capital goods companies over the last decade as the domestic manufacturing and infrastructure cycle strengthened.
FII allocation to capital goods rose to 6.6% in FY26 from 6.2% in FY14, according to the report.
JM Financial also said DII allocation to pharma climbed to 7.1% from 4.5% during the same period.
The brokerage firm said the rise in healthcare allocation reflects stronger institutional preference toward earnings visibility and defensive growth sectors.
The report also showed BFSI remained the single-largest institutional allocation segment despite moderation in foreign ownership.
DII exposure to BFSI rose to 27.8% in FY26 from 19.2% in FY14, while FII exposure stood at 30.5%.
Promoter Buying (Q4FY26)
| Company | Stake Change |
| Adani Enterprises | ⬆ +0.7% |
| Adani Energy Solutions | ⬆ +1.5% |
| Grasim Industries | ⬆ +0.5% |
| Godrej Properties | ⬆ +4.5% |
| Jindal Stainless | ⬆ +0.8% |
Adani group companies, Godrej Properties and Jindal Stainless see promoter buying
JM Financial said several companies witnessed notable promoter stake increases during Q4FY26.
Among large caps, promoter holdings increased in Adani Enterprises by 0.7%, Grasim by 0.5% and Adani Energy Solutions by 1.5%.
The report also showed promoter holdings rising in Jindal Stainless by 0.8% and Godrej Properties by 4.5% during the quarter.
Among small caps, JM Financial highlighted #JB Chemicals & Pharmaceuticals, NCC, OneSource Specialty Pharma and Star Cement as companies where promoter holdings rose by more than 0.5% in Q4FY26.
The brokerage firm said promoter accumulation remained concentrated in select industrial, healthcare and infrastructure-linked names.
BHEL, IRFC, Vishal Mega Mart and Biocon among stocks seeing promoter stake cuts
JM Financial also flagged several companies where promoters reduced holdings during Q4FY26.
Among large caps, Hindustan Zinc saw promoter holding decline by 1.1% following an Offer for Sale in January 2026, while IRFC recorded a 1.7% reduction after an OFS in February 2026.
Among mid-caps, Bharat Heavy Electricals saw a 5% reduction in promoter stake through an OFS. Lloyds Metals reported a 2.1% decline, while Vishal Mega Mart witnessed a sharp 14% reduction through a bulk deal.
JM Financial also identified Bandhan Bank, Aadhar Housing Finance, Urban Company, Century Plyboards and Home First Finance among companies where promoter holdings declined during the quarter.
The report showed promoter ownership across listed Indian equities continuing to moderate as institutional participation rises steadily.
Domestic inflows continue changing India’s market ownership pattern
JM Financial said the rise of domestic institutional ownership marks a major change in the structure of Indian equity markets.
The brokerage firm linked the trend to rising SIP inflows, mutual fund penetration and increasing household allocation toward financial assets.
At the same time, JM Financial said foreign institutional ownership has moderated amid elevated Indian market valuations and shifting global capital flows.
The report showed promoter ownership, FII ownership and government ownership have all declined over the last decade, while DII ownership continued rising consistently.
JM Financial said the changing ownership mix now increasingly gives domestic institutions a larger role in determining sectoral flows, market leadership and stock-specific positioning across Indian equities.
Conclusion
JM Financial said the latest ownership trends suggest Indian equities are entering a phase where domestic institutional money is becoming the dominant force across sectors and stock-specific allocations.
The brokerage firm said the sharp rise in DII ownership alongside falling FII exposure to IT services and rising allocations toward capital goods, pharma and BFSI points to a deeper shift in market leadership driven by domestic savings, mutual fund inflows and India’s manufacturing and financialisation themes.
Disclaimer: Investment data and sectoral allocation trends outlined above are sourced from brokerage analysis and intended for general informational purposes only. This reporting does not constitute specific investment advice, a recommendation, or an offer to buy, sell, or hold any securities mentioned. Readers should consult a SEBI-registered investment advisor or qualified financial professional before making financial decisions based on institutional market flows or promoter activity. This disclaimer has been generated using AI to support user well-being and responsible content consumption.
