Foreign Investors Unload Indian Stocks, Biggest Selling Since 2022, Amid Select Buying in Other Stocks

Foreign Portfolio Investors Diversify Indian Equities Amid Declining Ownership

Foreign portfolio investors (FPIs) have significantly expanded their exposure across Indian equities in the last four years, despite a sharp decline in their overall ownership in the market. According to a report by ICICI Securities, aggregate FPI ownership in Indian equities has fallen to nearly 15% currently from close to 20% a decade ago, with most of the reduction taking place after the Russia-Ukraine conflict in 2022 triggered a shift in global investment trends.

The number of stocks in which FPIs hold more than 1% stake has risen from nearly 900 in March 2022 to around 1,300 currently, reflecting broader participation across sectors and market capitalizations. This trend indicates that FPI investments in India are becoming more broad-based, driven by growth opportunities. However, the copious selling in erstwhile concentrated positions is skewing the overall picture.

FPI Holdings in Large-Cap Stocks Decline Sharply

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The sharpest reduction in FPI holdings has been visible in large-cap stocks that historically dominated foreign investor portfolios. The combined contribution of HDFC and HDFC Bank to FPI portfolios declined from 11.6% in March 2022 to 6.9% in March 2026, marking a drop of 4.7 percentage points. FPIs also sharply reduced exposure to Reliance Industries, where portfolio contribution fell from 9.1% to 5.3% during the same period. Similarly, holdings in Infosys declined from 5.8% to 2.1%, while exposure to Tata Consultancy Services dropped from 4.2% to 1.3%.

FPIs Increase Exposure to Emerging Businesses and Domestic Growth-Oriented Sectors

Despite reducing exposure to several large-cap index heavyweights, FPIs simultaneously increased investments across multiple emerging businesses and domestic growth-oriented sectors. Among large-cap companies, foreign investors sharply increased holdings in Eternal from 10.4% in March 2022 to 30.8% in March 2026. FPIs also raised stakes in HDFC Asset Management Company from 10.4% to 24.5%, while holdings in Polycab India climbed from 5.8% to 18.2%.

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FPIs Remain Net Sellers in Indian Equities

Despite the broader diversification trend, FPIs continued to remain net sellers in Indian equities during 2026. According to the report, FPIs pulled out ₹60,900 crore from Indian equities in April 2026 alone. Financials witnessed the highest selling at ₹30,900 crore, followed by consumer discretionary, healthcare, energy, and automobile sectors. So far in calendar year 2026, FPIs have withdrawn nearly $21.7 billion from Indian markets, extending the selling trend seen in calendar year 2025, when foreign investors pulled out $18.8 billion from equities.