This present approach suggests a bio-inspired bat algorithm for optimal sizing of Distribution STATic COMpensator (DSTATCOM) to mitigate the total power loss of the system in the radial distribution systems (RDS). In the present approach, a new voltage stability factor (VSF) is utilized to identify the optimal placement for installation of DSTATCOM and the proposed VSF is compared with other stability indices. Bat algorithm (BA) is used to search the optimal size of DSTATCOM. The backward/forward sweep (BFS) algorithm is established for the power flow calculations. To verify the feasibility of the proposed work, it has been implemented on standard IEEE 33-bus RDS. The outcomes obtained using the proposed method shows that the optimal location of DSTATCOM in RDS adequately mitigates the loss at the same time enhances the bus voltages.