₹3 trillion FPI outflows: Samvat 2082 set for worst selling in 17 years

FPI selling in India: Over the last nearly two decades, Indian equities have witnessed a clear shift in market leadership from foreign to domestic investors.

 

An analysis by the Business Standard Research Bureau showed that Foreign Portfolio Investors (FPIs) were net sellers in four of the 17 Samvat years since Samvat 2066, while mutual funds were net sellers in five years.

 

In the current Samvat 2082, trends indicate that FPI selling has already touched record levels, while mutual funds buying is on track to scale an all-time high.

 

FPIs have sold a record ₹3.01 trillion worth of equities in the current Samvat and could register their highest-ever selling in a Samvat year. READ MORE: How to invest ₹1 lakh in Samvat 2083? MOFSL's Siddhartha Khemka answers  MFs, on the other hand, have purchased equities worth a record ₹5.6 trillion in the current Samvat, marking their highest-ever buying in a Samvat year.

 

 

Experts said that this divergence highlights the growing strength of domestic savings, mutual fund SIP flows, insurance investments and retail participation, which have increasingly cushioned the market against foreign selling pressure. 

FPIs, MFs activity in Samvat years

 

"The data underscores a structural transformation in Indian capital markets, where domestic institutions are emerging as the primary source of liquidity and market support, reducing the market's historical dependence on foreign portfolio flows," Sudeep Shah, head - technical and derivatives research at SBI Securities, said. Also Read | Samvat 2082: IPO fundraise crosses ₹2-trillion mark for the first time ever 

 

"Foreign flows to remain volatile"

 

Sneha Poddar, VP – research, Wealth Management, Motilal Oswal Financial Services, said that foreign flows are expected to remain volatile unless geopolitical tensions ease, global interest-rate expectations soften, crude prices moderate and the rupee stabilises. Further narrowing of India's valuation premium, progress on key trade agreements and improving corporate earnings could also support sentiment.

 

"We perceive FY27 to mark a return to double-digit earnings growth, with Nifty EPS expected to grow 16 per cent/14 per cent Y-o-Y in FY27/FY28, compared with 5 per cent in FY26. Improving earnings delivery, alongside a more supportive global macro environment, could gradually revive foreign investor interest in Indian equities," she said. 

 

Disclaimer: Views and outlook in this report belong to the brokerages and analysts cited. They do not reflect the views of Business Standard. Readers are advised to exercise discretion.