FPIs Invest ₹16,621 Cr in Indian Equities: August Inflows Surge

Foreign Portfolio Investors (FPIs) injected Rs 16,621 crore into Indian equities during the first half of August. This marks a continued buying trend after July’s substantial inflows.

This recent activity follows four consecutive months of significant FPI selling, where a total of Rs 2.6 lakh crore was withdrawn from March to June. Despite the current positive momentum, FPIs remain net sellers in Indian equities for 2026.

Key Inflow and Outflow Figures

• August (first half) Equity Inflow: Rs 16,621 crore
• July Equity Inflow: Rs 20,200 crore
• March-June Equity Outflow: Rs 2.6 lakh crore
• 2026 Net Equity Outflow (YTD): Rs 2.4 lakh crore
• 2025 Total Equity Outflow: Rs 1.66 lakh crore

Market experts attribute this renewed interest to a confluence of factors, signalling a shift in investor sentiment. Several global and domestic indicators contributed to the reversal of the previous selling trend.

Underlying Drivers for Inflows

• Improved relative valuations of Indian equities.
• Robust corporate earnings reports.
• Expectations of interest rate cuts in the US.
• Softer crude oil prices globally.
• Reduced currency volatility.

Manish Bhandari, CEO and Portfolio Manager at Vallum Capital, noted a diversification strategy at play. He specifically highlighted a move away from “crowded Korea-Taiwan AI trades” as a contributing factor to the inflows.

Vedant Gupte, Co-Founder and CEO of investment platform Trackk, explained that previous FPI selling stemmed largely from global macro factors rather than specific concerns about India. He further observed a more selective approach in current FPI buying, targeting specific sectors.

In July, FPIs demonstrated strong buying across several key sectors, indicative of this strategic preference. This focused buying highlights areas of perceived value within the Indian market.

Key Sectoral Interest and Debt Flows

• Strong FPI buying in Consumer Services, Healthcare, Consumer Durables, Metals & Mining, and IT sectors during July.
• FPIs invested Rs 972 crore in Indian debt via the Fully Accessible Route (FAR) in the review period.
• An additional Rs 69 crore was invested through the general debt route.

Future FPI flows are expected to remain highly sensitive to global economic indicators and geopolitical developments. Investors will closely monitor US Treasury yields, the dollar index, crude oil prices, and corporate earnings upgrades.

Additionally, US-Iran geopolitical tensions will be a key consideration in the coming week, influencing market direction. These external factors will continue to shape FPI investment decisions in India.