FIIs Selling in Indian Equities Nears ₹2 Lakh Crore Mark Within First 4 Months of 2026

Foreign Institutional Investors (FIIs) have recorded net outflows of over ₹2 lakh crore from India’s secondary markets in 2026, with 8 months still remaining in the year.  

Data from the National Securities Depository Limited (NSDL) shows equity sales of about ₹1.98 lakh crore between January and April.  

Provisional figures from the National Stock Exchange of India indicate a further ₹4,000 crore of selling in early May. 

Outflows Near Full-Year Levels 

The pace of withdrawals in the current year is approaching the ₹2.4 lakh crore recorded for the full year 2025 and exceeds ₹1.29 lakh crore seen in 2024.  

Continued selling since mid-2024 has reduced foreign ownership in NSE-listed companies to nearly 15% as of mid-April, the lowest level in more than 15 years. India has also seen reduced allocation within global emerging market portfolios. 

Pressure on IT and Banking Stocks 

Selling activity has been concentrated in information technology and banking shares. IT companies are facing slower demand and limited exposure to artificial intelligence-related spending compared with peers in other Asian markets.  

Banking stocks have been affected by concerns around governance, the impact of higher bond yields on treasury income, and changes in provisioning requirements. 

Global Factors and Valuation Differences 

External developments have influenced investor flows. Tensions involving the United States, Iran and Israel pushed crude oil prices above $100 per barrel, raising concerns over inflation and currency stability.  

At the same time, US Treasury yields of over 4% in dollar terms have offered an alternative to equities. Valuation differences have also played a role, with China’s CSI 300 Index trading at lower earnings multiples than Indian indices. 

Divergence in Market Performance 

Other Asian markets have recorded stronger gains in 2026. Taiwan’s equities have risen nearly 40% in dollar terms, while South Korea’s Kospi has gained about 62%. Japan’s Nikkei is up around 18% and the Shanghai Composite has increased by roughly 7%.  

In contrast, the BSE Sensex and Nifty 50 have declined by about 13-14% so far this year. 

Primary Market Flows and Asset Allocation 

Despite secondary market outflows, FIIs have continued to invest in primary issuances, with inflows of about ₹12,156 crore so far in 2026. IPOs have delivered average returns of around 37.1%, compared with just over 7% in the secondary market.  

Gold ETF inflows have reached ₹31,561 crore, while silver ETFs have seen inflows of ₹7,953 crore. 

Read More: Domestic Investors Strengthen Hold on Indian Equities as Foreign Investors Pull Back! 

Conclusion 

FII activity so far in 2026 shows a combination of global interest rates, valuation differences and sector-specific pressures, with further trends dependent on earnings and global conditions. 

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