How much did Indian investors actually make in the last two years?
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Indian investors have poured record amounts of money into equities over the past two years, but the returns have been far less spectacular than the headline market narrative suggests. Also, the outcome has varied sharply depending on where investors put their money.
Between September 16, 2024 and September 15, 2026, the Nifty 50 fell 8.9% on a price-return basis, from 25,383.75 to 23,118.60. Including dividends, the picture improves but remains subdued. An analysis of NSE Total Return Index data by Zerodha Varsity showed the Nifty 50 TRI delivered an annualised return of -1.9% over the two-year period.
The broader market fared somewhat better. The Nifty Midcap 100 TRI delivered an annualised return of 3.7%, while the Nifty Smallcap 100 TRI gained 1.3% annually over the same period. On a simple point-to-point price basis, however, both indices were broadly flat.
Sector bets made a bigger difference
The headline indices, however, conceal significant divergence between sectors.
Over the same two-year period, the Nifty Metal index gained roughly 34%, while the Nifty Pharma index rose around 12%. Nifty Bank gained about 7%, and Nifty Auto around 3.5%. In contrast, the Nifty IT index fell nearly 32%.
That divergence means the experience of an investor holding a concentrated sector portfolio could have been markedly different from that of someone simply tracking the Nifty 50.
The two-year period also included substantial swings. The Nifty touched record highs during the period before retreating sharply in 2026, while several sectors went through their own earnings and valuation cycles. The result was a market in which stock and sector selection mattered considerably more than the headline index performance.
Foreign investors sold, domestic money stepped in
The subdued benchmark returns came despite an unprecedented flow of domestic money into Indian equities.
Foreign portfolio investors sold a net ₹1.27 lakh crore of Indian equities in FY25 and around ₹1.8 lakh crore in FY26, according to SEBI data. Domestic institutional investors, meanwhile, bought a record ₹6 lakh crore in FY25 and ₹8.5 lakh crore in FY26.
SEBI has described domestic institutions as a critical buffer against FPI outflows. The shift is significant because foreign investors have traditionally had large holdings in India's most liquid large-cap companies, meaning sustained FPI selling can put pressure on benchmark-heavy stocks.
Domestic flows have increasingly come through mutual funds and systematic investment plans. SIP contributions reached a record ₹3.50 lakh crore in FY26, while monthly SIP contributions hit an all-time high of ₹32,297 crore in August 2026.
August also showed where fresh domestic money was going. Equity mutual funds received ₹29,329 crore, with smallcap schemes attracting ₹7,973 crore and midcap schemes ₹6,989 crore. Large-cap funds, meanwhile, recorded outflows for a second consecutive month.
This creates an important distinction between market returns and investment flows. Domestic investors have continued committing more money to equities even though the broad benchmark has delivered little or negative return over the two-year window.
Valuations remain part of the equation
The strong domestic liquidity has also coincided with valuation concerns in parts of the broader market.
Motilal Oswal's 2026 outlook had put the Nifty Midcap 100 at a significant premium to its long-term average valuation and the Smallcap 100 at an even larger premium. BofA Securities similarly argued in its India strategy outlook that scope for further valuation expansion in the Nifty was limited.
That makes the latest market correction particularly relevant. Elevated crude prices, global bond yields and renewed FPI selling have added pressure to Indian equities, with the Nifty ending September 15 at a five-month low of 23,118.60.
The past two years, therefore, offer a more nuanced picture than either a bull-market or bear-market label. Indian households have committed unprecedented amounts of money to equities, but the returns depended heavily on the index, sector and investment route chosen.