India's Stock Market Sees Record Foreign Outflows and Notable Small‑Cap Purchases

Foreign portfolio investors have been pulling money out of Indian equities at an unprecedented pace. In the first week of June they sold roughly ₹43,000 crore of shares, taking total 2026 outflows to about ₹2.67 lakh crore—well above the ₹1.66 lakh crore withdrawn in the entire previous year. Analysts cite the global rush toward AI and technology assets, a weakening rupee and higher U.S. bond yields as drivers. The Indian government and RBI have responded with measures such as tax exemptions on interest and capital gains from government securities, covering hedging costs for bank‑sourced FCNR deposits, expanding the forex‑swap window, easing access to government bonds via the Fully Accessible Route, and raising investment limits for NRIs and OCIs. Despite the equity sell‑off, foreign investors placed more than ₹2,600 crore in the Indian debt market during the same week, bringing total debt‑market inflows to ₹17,230 crore.

Veteran investor Vijay Kedia made headlines by acquiring a 1.02% stake (44.44 lakh shares) in Websol Energy System, a solar‑panel maker that has cleared much of its debt and is poised to benefit from government solar schemes such as PM Sun House. He also bought shares in Mahamaya Lifesciences, an agri‑biotech SME listed on the BSE SME platform, noting its strong profit growth but warning of liquidity risks inherent to small‑cap listings. Kedia’s dual move underscores his strategy of targeting both turnaround opportunities and high‑growth sectors within India’s market.