Despite Rs 13,000 Crore Stock Sell-Off by Individual Investors, Zerodha Clients Continue to Buy, Says Nithin Kamath
The latest data from the Indian equity markets reveals a significant shift in investor behavior, with individual investors selling approximately Rs 13,000 crore worth of direct equities between December 2025 and March 2026. Notably, while retail investors were net sellers, clients of Zerodha, a prominent retail brokerage, emerged as net buyers of a comparable amount. Co-founder Nithin Kamath emphasizes a broader trend wherein retail participation is increasingly being directed towards mutual funds rather than individual stock picking, indicating a fluctuating landscape for direct retail ownership, which has now become relatively stagnant. This shift aligns with the findings from Prime Infobase, which highlighted that individual investors’ combined shareholding in NSE-listed companies has diminished to a five-year low of 9.11% as of March 2026.
This transition underscores the growing maturity among Indian investors, who are now more inclined to entrust their investment decisions to professional fund managers via mutual funds. As articulated by Pranav Haldea, Managing Director of Prime Database Group, the rising preference for mutual funds reflects a fundamental change in investment strategy. The data illustrates that domestic mutual funds have escalated their holdings to an unprecedented 11.46%, marking eleven consecutive quarters of growth, while individual investor ownership has remained essentially flat. Comparatively, back in March 2012, mutual funds held a mere 3.21% of the listed equities, highlighting a remarkable evolution in investor preferences over the past decade.
The decline in foreign institutional investors’ share, now at a 14-year low of 16.13%, alongside growing domestic institutional ownership—reaching an all-time high of 19.24%—contrasts sharply with the earlier dominance of FIIs in the Indian market. The narrowing gap between mutual fund ownership and that of foreign investors signifies a transition to a more self-reliant, or “atmanirbhar,” ownership model among Indian market participants. This new trend is also evident in the surge of systematic investment plans (SIPs), with monthly inflows reaching near-record levels of Rs 32,000 crore, thereby enabling domestic institutions to absorb the selling pressure from foreign funds. Collectively, these trends illustrate a resilient market environment characterized by a robust domestic institutional framework that not only stabilizes the market but also demonstrates an evolving investor landscape.
Source: The Economic Times
(Expert Note: This report was prepared by the Wealthova team.)