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FPIs Pump Rs 16,621 Crore into Indian Equities During First Fortnight of August

Foreign portfolio investors (FPIs) sustained their positive momentum in the Indian stock market by purchasing Rs 16,621 crore worth of equities during the first fortnight of August. This follows an inflow of Rs 20,200 crore recorded in July, signalling a shift after months of heavy divestment earlier in the year.

What Happened

According to depository data from CDSL, foreign portfolio investors returned as net buyers in Indian equities, injecting Rs 16,621 crore during the opening two weeks of August. This development follows Rs 20,200 crore invested in July, building a two-month recovery.

The current buying streak marks a notable shift from substantial outflows between March and June. Prior to July, FPIs pulled out Rs 49,340 crore in June, Rs 32,963 crore in May, Rs 60,847 crore in April, and Rs 1.17 lakh crore in March. Before that four-month selloff, foreign investors had infused Rs 22,615 crore in February.

Despite the recent influx, foreign investors remain overall net sellers for 2026, having offloaded approximately Rs 2.4 lakh crore from Indian equities so far, surpassing the Rs 1.66 lakh crore withdrawn across the entirety of 2025.

Key Highlights

  • August Inflows: FPIs invested Rs 16,621 crore in Indian equities in the first fortnight of August.
  • Two-Month Reversal: The inflows follow an addition of Rs 20,200 crore in July, following four consecutive months of selling totaling over Rs 2.6 lakh crore.
  • Year-to-Date Context: Total net outflows for 2026 stand at approximately Rs 2.4 lakh crore.
  • Sectoral Focus: July buying data showed strong foreign inflows into domestic consumption and key sectors, including Consumer Services, Healthcare, Consumer Durables, Metals & Mining, and Information Technology.
  • Debt Market Participation: Overseas investors also allocated Rs 972 crore into debt through the Fully Accessible Route (FAR) and Rs 69 crore through the general route.

Why This Matters

Market experts attribute the renewed interest to a combination of more attractive relative valuations, resilient corporate earnings, and expectations of interest rate cuts in the United States. Other supporting elements include softer crude oil prices and reduced currency volatility.

Manish Bhandari, CEO and portfolio manager at Vallum Capital, told PTI that the turnaround is supported by relative valuations, corporate resilience, expectations of softer US rates, currency stability, and capital moving away from crowded Korea-Taiwan artificial intelligence trades.

Vedant Gupte, Co-Founder and CEO of Trackk, noted that earlier FPI selling was driven more by global macroeconomic factors than domestic issues. He highlighted that expectations of US rate reductions, lower crude costs, and a stabilizing rupee have addressed previous foreign investor concerns. Gupte also pointed out that foreign buyers are increasingly focusing on the domestic household, driving selective interest into sectors such as healthcare and consumer durables.

What to Watch Next

The continuity of foreign investment flows remains subject to shifts in global market conditions. Analysts point out that upcoming trends will likely remain sensitive to US treasury yields, the dollar index, crude oil market shifts, and adjustments to corporate earnings forecasts.

In the near term, investors are expected to track crude oil prices and ongoing developments surrounding US-Iran geopolitical tensions, according to Pabitro Mukherjee, deputy vice president of research at Bajaj Broking.

Frequently Asked Questions

How much did FPIs invest in Indian equities in August?

Foreign portfolio investors bought Rs 16,621 crore worth of Indian equities during the first fortnight of August.

Which sectors have seen strong FPI interest recently?

Sectoral data from July indicated notable foreign buying in Consumer Services, Healthcare, Consumer Durables, Metals & Mining, and IT.

Did foreign investors also invest in Indian debt instruments?

Yes, FPIs put Rs 972 crore into the debt segment via the Fully Accessible Route (FAR) and an additional Rs 69 crore through the general route during the review period.

Source: timesofindia.indiatimes.com