Truth that Matters. Stories that Impact

Truth that Matters. Stories that Impact

Business

Foreign Portfolio Investors Pump Rs 23,544 Crore into Indian Equities in August

Foreign portfolio investors (FPIs) have maintained their buying momentum in Indian equities, injecting Rs 23,544 crore into the market in August so far. Improved corporate earnings, a steady rupee, and brighter domestic market prospects have contributed to the rebound in investor sentiment.

What Happened

The August purchases build on an inflow of Rs 20,200 crore recorded in July. These two back-to-back months of positive net inflows arrived after a four-month period of significant selling by overseas investors earlier in the year.

Selling was pronounced through the first half of the year. According to CDSL data, after investing Rs 22,615 crore in February, FPIs pulled out Rs 1.17 lakh crore in March, Rs 60,847 crore in April, Rs 32,963 crore in May, and Rs 49,340 crore in June.

Despite the recent inflows in July and August, foreign investors remain net sellers on an annual basis. Total FPI withdrawals have reached roughly Rs 2.3 lakh crore for 2026 so far, which is higher than the total outflow of Rs 1.66 lakh crore reported across the entire year of 2025.

Key Highlights

  • FPIs invested Rs 23,544 crore in Indian equities in August so far, following Rs 20,200 crore in July.
  • The purchases ended a consecutive four-month selling run where overseas funds pulled out Rs 1.17 lakh crore in March, Rs 60,847 crore in April, Rs 32,963 crore in May, and Rs 49,340 crore in June.
  • Net withdrawals for 2026 so far stand at around Rs 2.3 lakh crore, overtaking the full-year 2025 outflow of Rs 1.66 lakh crore.
  • In the debt segment, foreign investors contributed Rs 852 crore via the Fully Accessible Route (FAR) and withdrew Rs 995 crore via the general route.
  • Portfolio allocations show selective buying in mid-cap shares, alongside a cautious stance on large-cap IT and banking shares.

Why This Matters

V K Vijayakumar, chief investment strategist at Geojit Investments, noted that foreign interest has been rekindled by Q1 earnings growth, currency stability, broader market prospects, and an exit by investors from the so-called ‘chip trade’. However, Vijayakumar observed that foreign buying has remained uneven, with investors steering clear of heavyweight banking and IT shares despite attractive valuations, while selectively purchasing mid-cap equities despite elevated price levels.

What to Watch Next

Market trajectories in the coming days are expected to be influenced by global cues. Pabitro Mukherjee, deputy vice president of research at Bajaj Broking, indicated that near-term market movement could be affected by crude oil price changes and developments surrounding US-Iran geopolitical tensions.

Frequently Asked Questions

How much have FPIs invested in Indian equities in August?

Foreign Portfolio Investors have invested Rs 23,544 crore in Indian equities in August so far.

What factors contributed to the renewed foreign inflows?

Market experts credit an earnings revival seen in first-quarter corporate results, stability in the Indian rupee, strong growth prospects in the broader market, and a shift away from the chip trade.

Are foreign investors buying all sectors equally?

No. According to Geojit Investments, FPIs have selectively purchased mid-cap stocks while avoiding large banking and IT shares despite their valuations.

What did foreign investors do in the debt market?

During the period reviewed, foreign investors allocated Rs 852 crore to debt instruments through the Fully Accessible Route and pulled out Rs 995 crore via the general route.

Source: timesofindia.indiatimes.com