DIIs book profits in longest selling streak in 4 years
Domestic institutional investors have recently unloaded more than ₹47,662 crore worth of equities amidst a market upswing. This shift showcases their tendency to lock in profits following substantial input into Indian stocks. Conversely, foreign p...
For years, domestic funds have provided the backstop against exiting foreigners, lifting the share of local stock ownership to a record and preventing a rout of Indian risk assets
Over the past fortnight, however, as foreign funds have come flooding in, domestic institutional investors (DII) have sought to book the profit of patience.
Mutual funds, banks, insurers and retirement funds have turned net sellers over the past nine sessions, marking their longest selling streak in four years.
Their exits coincide with the sharpest rally in Indian benchmark indices in years - and the meltdown of AI-themed trades in eastern Asia.
Data from the NSE showed that DIIs sold equities worth over ₹47,662 crore between October 30 and November 12, marking their longest selling streak since November 2022 when DIIs sold for 10 straight sessions.
If the trend continues, November could become the first month of net selling by DIIs since July 2023, when they offloaded around ₹2,700 crore. It could also mark their steepest monthly selling since November 2020, when they sold equities worth around ₹48,000 crore.
Nilesh Shah, managing director, Kotak Mahindra AMC, said the bulk of the selling is likely coming from profit-booking and portfolio rebalancing by Multi-Asset Allocation Funds (MAFs), Balanced Advantage Funds (BAFs), insurance companies and pension funds. The market rally has pushed up their equity exposure, prompting them to book profits to maintain their targeted asset allocation. Arbitrage funds have also contributed to the selling, albeit to a smaller extent, by exploiting reverse arbitrage opportunities in mid-cap stocks, where futures are trading at a discount to the cash market, prompting funds to sell shares and buy futures, Shah added.
ADVERTISEMENT
The DII selling comes even as foreign portfolio investors (FPIs) have returned to Indian equities. Since the beginning of November, the Sensex and Nifty have gained nearly 10% each, while the BSE MidCap 150 and BSE SmallCap 250 indices have advanced around 8% each. FPIs have invested around $8 billion in Indian equities since mid-October, amid a correction in AI-related stocks globally and a decline in crude oil prices.
Despite the recent selling, DIIs have remained a key source of support for the market through the year. Akshat Garg, AVP - Research & Product at Choice Wealth, said DIIs had been net buyers of over ₹6.5 lakh crore in 2026, supported by steady SIP and insurance inflows through market corrections. Following the sharp recovery, they are now trimming exposure to richly valued pockets, raising cash and allowing returning foreign investors to take on the role of marginal buyers.
