Foreign Portfolio Investors' (FPIs) stake in Indian equities drops to 14-year low
Foreign Portfolio Investors (FPIs) have significantly reduced their stake in Indian equities, reaching a nearly 14-year low of 14.7% (down from 19.9% a decade ago). This decline is attributed to sustained foreign selling, with FPIs being net sellers in four of the five trading sessions during the week ended May 8, resulting in total equity outflows of ₹14,207.20 crore. In contrast, Domestic Institutional Investors (DIIs) have increased their holdings to 18.9%, surpassing FPIs for the first time since December 2024. Analysts suggest India's underperformance in attracting foreign flows is partly structural, indicating FIIs do not find India as attractive from an allocation perspective compared to other emerging markets.
Key Points
- FPIs' ownership in Indian equities has fallen to a 14-year low of 14.7%.
- Domestic Institutional Investors (DIIs) now hold 18.9% of Indian equities, surpassing FPIs.
- FPIs were net sellers for most of the week, leading to significant equity outflows.
- The trend reflects a broader structural shift and India's underperformance in attracting foreign flows.
Exam Facts
- FPI ownership in Indian equities dropped to 14.7%.
- This is the lowest since June 2012.
- DIIs now hold 18.9% of Indian equities.
- Total FPI equity outflows for the week ended May 8 stood at ₹14,207.20 crore.
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