Domestic mutual funds in India are rapidly closing the shareholding gap with Foreign Institutional Investors (FIIs). Recent data shows mutual fund ownership increasing across top-performing listed companies, reflecting a sharp catch-up trend. Analysts attribute this to sustained inflows from systematic investment plans (SIPs), better fund penetration, and increasing retail participation. Industry experts believe the shift demonstrates confidence in local fund management and reduces reliance on FII inflows for market stability. While FIIs continue to be major players, domestic funds’ growing presence could influence corporate governance, investor behavior, and equity market dynamics in India.