Retail Investors Share Hits 22-Year Peak at 18.75% of NSE Market Capitalisation in Q2 FY26

Retail participation in India’s equity markets surged to historic levels in Q2 FY26, with individual investors’ share of market capitalisation in NSE-listed companies touching a 22-year high of 18.75%, according to NSE’s latest ownership data. 

In value terms, this represents around ₹83.6 trillion, supported by a 5- and 10-year CAGR of 29.8% and 21.1%, respectively.

Retail Investors Strengthen Market Presence

At the end of September 2025, individual investors’ ownership in NSE-listed companies stood at 9.6%, remaining within the 9.5–9.8% range seen over the past nine quarters. The rise in value share came amid renewed net inflows of ₹20,469 crore ($2.4 billion) during the quarter. 

Notably, ownership excluding the top 10% of companies by market capitalisation climbed 48 basis points quarter-on-quarter to a 19-year high of 16.7%, reflecting growing interest in mid- and small-cap stocks.

Foreign and Domestic Institutional Trends

The ownership gap between foreign portfolio investors (FPIs) and individuals has reversed over the decade, from 11 percentage points in March 2014 to -1.9 percentage points now. 

FPI ownership in NSE-listed companies fell to 16.9% in H1FY26, its lowest in over 15 years, driven by net outflows of $8.7 billion. In value terms, FPI holdings declined 5.1% quarter-on-quarter to ₹75.2 trillion as of September 30, 2025.

Read More: India’s Mutual Fund Assets Cross ₹70.9 Lakh Crore in October, Driven by Record Retail Participation!

Domestic Mutual Funds and Promoter Holdings

Domestic mutual funds (DMFs) continued their expansion streak, marking the 18th consecutive quarter of positive inflows, investing ₹1.64 trillion in Q2FY26. This lifted their ownership to record levels of 13.5% in the Nifty 50, 11.4% in the Nifty 500, and 10.9% across all NSE-listed firms. 

Meanwhile, promoter ownership held broadly steady at 50.1% for NSE-listed companies and 49.3% for Nifty 500 firms after four quarters of decline. Within the Nifty 50, however, promoter share slipped for the sixth straight quarter to 40.0%, a 23-year low.

Government Ownership and Market Dynamics

Government holdings in NSE-listed companies eased 10 basis points quarter-on-quarter to 10% in Q2FY26. Interestingly, PSU banks outperformed the broader market, with the Nifty PSU Bank Index rising 4.5% compared to a 3.8% drop in the Nifty Total Market Index. The combined data underscores a shifting ownership structure in Indian equities, marked by rising domestic participation and waning foreign dominance.

Conclusion

Q2FY26 reaffirmed the growing influence of India’s retail and domestic institutional investors, who continue to offset foreign capital volatility. As households deepen their equity exposure and mutual funds maintain steady inflows, domestic investors are shaping the next phase of India’s market maturity and resilience.

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