Corporate FDs can get you higher returns if you are prepared for the risk

A lot of people are unaware of corporate fixed deposits. These are similar to regular FDs, but are offered by private firms, typically non-banking finance companies (NBFCs). While these carry a higher risk than commercial bank FDs, they also offer slightly higher interest rates. However, it is prudent to keep in mind that such FDs are not insured against default. So make sure to do your due diligence before investing in them.

In a first, domestic institutional investors (DIIs) now own a larger share of India’s top 500 listed companies than foreign institutional investors (FIIs), according to the latest India Strategy Report by Motilal Oswal Financial Services Ltd. (MOFSL). This milestone marks a structural realignment in India’s capital markets, driven by strong domestic inflows, persistent FII selling, and expanding retail participation over the past decade.

As of March 2025, DII holdings reached a record 19.2% in Nifty-500 companies, overtaking FII ownership, which fell to a decadal low of 18.8%. A decade ago, the FII-DII ownership ratio stood at 2.1x; today, it has dropped to 1x, reflecting the growing dominance of domestic capital.

The report highlights that while promoter holdings have slipped to an all-time low of 49.5%, retail investor stakes remain flat, with most of the shift in ownership coming from institutional rebalancing. Over FY15–FY25, DIIs invested $195 billion, a staggering 3.7x more than FIIs (USD 53 billion) during the same period. This change accelerated post-FY21, with India’s post-COVID recovery, rising SIP volumes, and mutual fund penetration driving domestic flows.

Despite periods of volatility—including the 2024 general elections, global interest rate spikes, and recent geopolitical concerns—Indian markets scaled new highs, underpinned by DII conviction even as FIIs pulled back sharply.

The MOFSL report also notes that DIIs increased their holdings across 18 of 24 sectors, with the highest inflows going to Banks (private and PSU), Consumer Durables, Technology, Cement, Insurance, Oil & Gas, and Automobiles—sectors seen as long-term structural plays.