Mumbai, Aug. 16 -- India's booming market for initial public offerings is undergoing a decisive shift, with domestic institutional investors such as mutual funds, insurance companies, and banks establishing dominance over foreign players in underwriting new share sales.

Data from the past 24 months show DIIs are now responsible for at least 50% of the subscriptions in an IPO's anchor book-allocations made to select large investors at a fixed price before an offering opens, helping gauge demand and stabilize the deal.

That marks a sharp break from the days when foreign portfolio investors were the primary anchors in Indian IPOs.

While global uncertainties have spooked FPIs, India's deepening capital markets have enabled midsize and larg...