The surge in Initial Public Offerings (IPOs) significantly influences Domestic Institutional Investors (DIIs) and their ability to absorb selling pressure from Foreign Institutional Investors (FIIs). As DIIs increasingly allocate capital to participate in IPOs, they experience horizontal dilution, spreading their resources across numerous new listings instead of concentrating them in established stocks. This dilution limits their capacity to provide vertical support to the broader market during periods of significant FII selling, exacerbating market instability.
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