One of the largest domestic institutional players, LIC, has already met about 50% of its FY15 investment target of Rs 3 lakh crore.

Speaking on the sidelines of the Capital Markets Conference on Wednesday, Praveen Kutumbe, executive director-Investment Operations, LIC of India, said the insurer has invested approximately Rs 1.25 lakh crore in the debt and equity markets in the current fiscal.

While the break-up between equity and debt investments could not be ascertained, domestic institutional investors (DIIs) have recently outrun foreign institutional investors (FIIs) in terms of flows into equities. DIIs have been net buyers in each of the last seven sessions, pumping a total of $607 million, while FIIs have invested $179 million in the same period. However, in YTD, FIIs have pumped $13.6 billion in equities, while DIIs pumped $5 billion in the equity segment.

In the June quarter, LIC raised its stake in HCL and TCS by 0.09 percentage points (ppt) and 0.01 ppt, respectively. Other stocks that saw a rise in LIC holdings include ITC (0.55ppt), Ambuja Cements (0.35 ppt), Cairn India (0.16 ppt), Nestle India (0.15 ppt) and Dabur India (0.04 ppt).

Experts feel domestic institutions including mutual funds are likely to increase their holdings in equities. ?In terms of their (DIIs) share in institutional pie, the gradual erosion in DII relevance seems to have stabilised for now. Going forward, we expect this share to pick up again, as AUMs rise for domestic Mfs,? Credit Suisse said in a report.

According to a recent Crisil report, mutual funds? average assets under management (AUM) touched a record high of 10.59 lakh crore in the September quarter. ?Industry assets were primarily boosted by a surge in equity AUM and supported by gains in short duration debt funds,? Crisil said. For equity-oriented schemes, the AAUM grew the most at 23.49% q-o-q.

Industry players say that despite the recent run-up in equity markets, domestic institutions are looking to buy. ?As of today, most of the institutions are positive because of the strong election outcome and good track record of the government. So they are investing at current levels with a view that things will improve going forward,? said Hemant Kanawala, Head-Equity, Kotak Life Insurance.