FPIs to Shift Portfolio from IT to Infrastructure in FY26, What's Next for FY27?
Indian Equities See Record FPI Outflow in FY26
Mumbai: Foreign portfolio investors (FPIs) withdrew a record ₹1.8 trillion from Indian equities in the fiscal year 2026, as per data from the Centre for Monitoring Indian Economy (CMIE). This significant outflow, however, conceals a more nuanced trend in investor behavior.
While the headline figure suggests a broad exit from the Indian market, a closer examination reveals that FPIs have been strategically adjusting their portfolios. Specifically, they have reduced their exposure to the information technology (IT), defensive, and consumption sectors. Conversely, investors have selectively added to sectors closely tied to India's capital expenditure cycle.
| Sector | FY26 Outflow (₹ trillion) |
|---|---|
| IT | 0.6 |
| Defensives | 0.3 |
| Consumption | 0.2 |
| Capital Expenditure Cycle | 0.9 |
Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
This targeted shift in investment strategy suggests that FPIs are adapting to the changing economic landscape in India. By rebalancing their portfolios, investors are positioning themselves for potential long-term growth in the country's capital expenditure cycle.
Investor Takeaway
Investors may consider shifting their portfolio to sectors tied to India's capital expenditure cycle.
More in Economy
Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline
MoSPI Releases Uniform Norms for DDP Estimates with 2022-23 Base Year
