Foreign investors withdraw Rs 2.8 trillion from Indian equities

Foreign Institutional Investors (FIIs) are significantly reducing their exposure to the Indian secondary equity market, with withdrawals totaling approximately Rs 2.8 trillion in 2026. This trend has driven foreign ownership on the National Stock Exchange to a 17-year low.

Analysts attribute the sell-off to high valuations in established large-cap stocks and slowing corporate earnings growth. Investors are reportedly seeking better returns in other emerging markets, particularly those driven by artificial intelligence themes, such as South Korea and Taiwan.

Despite the exit from secondary markets, FIIs are shifting their strategy toward the primary market, investing over Rs 47,000 crore in IPOs to secure large stakes at fixed prices. Additionally, local institutions have provided market support, with net stock purchases of approximately $60 billion this year.