In the March 2026 quarter, domestic institutional investors (DIIs) have significantly strengthened their position in India's equity market, raising their holdings in Nifty 500 companies to a record 20.9%. This increase comes as foreign portfolio investors (FPIs) have reduced their ownership to an all-time low of 17.1%, reflecting a contraction in the FII-to-DII ownership ratio to 0.8x. The analysis by Motilal Oswal Financial Services indicates that despite geopolitical tensions and volatile global flows, DIIs have maintained robust participation, injecting $27.2 billion into equities during the quarter. Conversely, FPIs experienced a tumultuous period, with outflows totaling $15.8 billion in March alone, exacerbated by the Iran conflict. Notably, DIIs have increased their stakes across 21 out of 24 sectors, particularly in private banks, technology, telecom, real estate, healthcare, and non-banking financial companies (NBFCs). The report emphasizes that this trend is structural, driven by the financialization of household savings and the deepening of domestic capital markets. While DIIs have emerged as the market's anchor, the report cautions that foreign flows remain a critical factor, with a potential stabilization of geopolitical conditions possibly improving FPI sentiment.