Tracking changes: FPI holdings in midcaps at multi-year high, shows data

FPIs raised exposure to midcaps to a multi-year high in December quarter even as overall equity flows turned volatile and largecap holdings eased

Even as foreign portfolio investors (FPIs) withdrew $1.34 billion from domestic equity markets during the December 2025 quarter, their exposure to midcap stocks increased, while holdings in largecaps and smallcaps moderated. 

According to an analysis by Elara Capital, FPI ownership in the Nifty Midcap 150 index rose 3 basis points (bps) quarter-on-quarter to 16.4 per cent, marking a multi-year high. In contrast, FPI holdings in the Nifty 50 and Nifty Smallcap 250 declined by one basis point each to 25.5 per cent and 14.2 per cent, respectively. 

FPI flows were volatile during the quarter, remaining positive in October ($1.26 billion) and November ($40 million), before turning sharply negative in December, with outflows of $2.6 billion. So far in January, FPIs have sold nearly $3.5 billion worth of equities, leading to a 4 per cent decline in the Nifty 50 index. 

Meanwhile, domestic institutional investors (DIIs) continued to raise their ownership across market segments. DII holdings in the Nifty Midcap 150 rose 6 bps to 17.3 per cent, while their stake in the Nifty 50 increased 8 bps to 16.8 per cent. In the Nifty Smallcap 250, DII ownership edged up 1 bps to 14.6 per cent. 

“India’s market ownership is undergoing a structural rebalancing, with promoter holdings gradually diluting, DIIs emerging as the dominant long-term capital base, FPI flows remaining cyclical and tactically driven, and public and retail ownership largely stagnant,” Elara said in a note.