There are different types of investors in the security market. Those who invest individually and in their personal capacities are known as retail investors. Retail investors form only a small portion of the share market. The other kind is institutional investors who invest in the share market via their firm and on an individual basis. They are the elephants of the stock market. FII and DII are institutional investors. Hence, in this article, we are going to explore FII and DII, FII DII data, and its effects on the market. 

Insurance companies, hedge funds, investment banks, mutual funds, and pension banks constitute institutional investors. Institutional investors, through their pooled funds like SIP investments, insurances bought from customers, invest in various markets. These investors influence the share market to a great deal. It is also observed that when these investors buy, the stock markets show a bullish trend. Whereas, when they sell, the markets experience a bearish trend. 

Foreign Institutional Investors, also known as FII, and Domestic Institutional Investors, known as DII, are institutional investors. These are dependent on the factor of whether the investment in the Indian financial markets is from foreign or domestic institutions. 

Now, let’s get to know more about FII and DII.

What is FII and DII?

FII basically denotes an investor or an investment fund that is based out of a nation and invests in that country’s assets. This is a widely used term for foreign firms indicating their investments in India’s capital markets. They are registered with SEBI. The FII activity has a greater influence in the domestic capital markets. Examples of FII in the Indian capital markets would be Vanguard, Black Rose, Government of Singapore, to name a few. Foreign Institutional Investors include multinational insurance firms, pension funds, hedge funds, and mutual funds that are situated outside of India. 

Just contrary to FII, DII’s invest in the nation’s capital markets in which they are currently residing. Examples of DII in the Indian capital markets would be Domestic Pension Funds, HDFC, Nippon AMC, to name a few. Domestic Institutional Investors include Indian banks and insurance firms, local pension plans, mutual funds, and financial organisations. 

The FII DII data is extremely crucial to track the broader trends in the capital markets.

How do FII and DII work?

As already mentioned, both FII and DII are registered under SEBI which is India’s watchdog. Owing to its superior research, FII has more importance in the capital markets compared to DII. 

As per studies and research, DII and FII invest in securities such as bonds and equities. It goes without saying that the invested amount is tremendous. Nonetheless, FII has more buying capacity than DII.

FII buying and selling data and DII buying and selling data volumes influence and change the marker direction. Hence, they are known as market movers. The FIIs have short to medium-term investment path, whereas, the DIIs have long-term investment objective. 

As per SEBI Regulations, FIIs are limited to 24% investment of the paid-up company receiving the investment. Nevertheless, 30% can be invested by FIIs if the shareholders’ approval is received. 

How to read FII DII Data?

The DII FII data is responsible for today’s financial environment. Hence, it is important that retail investors are able to read it effectively. As retail investors, we can study and research which companies the DIIs and FIIs are investing in, what stock they are buying or selling. By studying and executing their methods, we can also earn a significant amount of money.

When DIIs or FIIs invest in a particular firm, retail investors get an idea of how the stock is going to perform in the future. So, even they can bet on that firm. Hence, we can say that FIIs’ and DIIs’ money inflow work as an integral indicator.

As individual investors, we can make mistakes while studying the FII DII data. So, sometimes we can take the assistance of some app or website to aid our findings and research. StockEdge is one such app where you can successfully study the FII DII data NSE. StockEdge is a stock analytics app where users can opt for self-research by using tools like technical research, fundamental research, derivatives research, use scanners, and charts to determine a stock’s price movement, and a lot more to earn a steady income from the capital markets. StockEdge is India’s largest and best-growing stock analytics app. 

How can you read the FII DII data on StockEdge?

When you use StockEdge, you can effortlessly study the FII selling data, buying data, DII buying, and selling data through the four different sections in the FII DII tab.

  1. Day-wise: In the day-wise section, you will find the DII and FII net buying and selling data for that particular day. In just one glance, you can easily understand the complete picture by looking at the positive and negative bars. Moreover, you will also find the NIFTY market price and India vix. Nonetheless, data for the last 10 trading days is also available. 
  2. Cash Market or CM Provisional: In this section, you will simply find buying and selling data for the CM. For checking FII DII data separately, there are different sections allotted to each. This tab also provides daily, monthly, and yearly data, yearly and monthly being available for the last ten years. Note that the data here is provided by brokerages. Hence, the data is not accurate.
  3. CM SEBI: Unlike CM Provisional, the data here is completely accurate and you will find only FII data. The data is supported by FII custodians and is provided by SEBI. Akin to CM Provisional, different sections are allotted to daily, monthly, and yearly data. In addition, you can choose between the Debt or Equity market by clicking on the “Equity” button and choose between Primary and Secondary by clicking on the “Secondary Market” button. 
  4. Derivatives: This tab specifically focuses on FII derivatives data. You will get the data for Stock Future, Stock Option, Index Future, and Index Option in this section. Traders who trade in Options and Future Market will find this section beneficial and handy. 

Impact of FII and DII on Indian Capital Markets

Undoubtedly extreme research is performed by individuals and companies analysing the effects of FII DII data on the capital markets. Even though the studies are performed on past data and events, and they might not be applicable in the future, but they are useful for medium-term effects. 

Studies conducted have shown the huge impact of FII in both SENSEX and NIFTY. An increase in the Indian stock market is index is seen whenever there is a huge FII flow. Another study conducted during the Global Recession Period has shown that after the recession due to a decrease in interest rate, investors are looking for Asian capital markets to invest in. Hence, post the global recession, there is a surge in FII flow in the Indian stock market.

It is extremely important to note that a nation’s legal and political scenario affects the capital markets. A national government offering tax holidays, corporate tax reductions, subsidies, and financial incentives, create a propitious investment environment. In such a condition, not only FIIs but also DIIs are eager to invest in Indian capital markets. 

Final Word

Foreign Financial Institutions have a great influence on the Indian Stock Market. Also, NIFTY and DII are also positively correlated. FII DII data is crucial to study to make wise decisions for investing in the Indian Capital Markets. With StockEdge, your research becomes more comprehensive and beneficial.