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Foreign Portfolio Investor (FPI) ownership in companies listed on the National Stock Exchange of India has been on a sustained decline since March 2023, with foreign shareholding falling to a 17-year low during FY26, according to a report by the National Stock Exchange (NSE).
The report stated that the decline reflects heightened volatility in foreign portfolio flows along with the structural rise in domestic institutional participation in Indian equity markets. According to the NSE report, FPI ownership in NSE-listed companies declined by 166 basis points during FY26 to 15.8 per cent as of March 31, 2026. The decline intensified during the March quarter, when FPI share fell by 90 basis points quarter-on-quarter. NSE said FPI net outflows during FY26 stood at a record USD 19.6 billion. Nearly 72 per cent of these outflows, amounting to USD 14.2 billion, occurred during the March quarter alone. In value terms, FPI holdings in NSE-listed companies declined by 17.9 per cent quarter-on-quarter to Rs 64.6 lakh crore as of March 31, 2026. The report further stated that FPI ownership in Nifty 50 and Nifty 500 companies also declined sharply during the March quarter. According to the NSE, FPI shareholding in Nifty 50 companies fell by 2 percentage points quarter-on-quarter to 21.8 per cent, while ownership in Nifty 500 companies declined by 1.2 percentage points to 16.8 per cent. These levels are near 14-year and 17-year lows respectively. Despite the broader decline in holdings, FPIs continued to maintain an overweight position in the financial sector, although the extent of this overweight stance narrowed sharply. The report also noted that FPIs retained an overweight position in Communication Services for the seventh consecutive quarter. At the same time, foreign investors turned relatively less negative on commodity-oriented sectors due to improved relative performance and incremental allocations. However, they continued to maintain an underweight stance on Materials and a neutral position on Energy. FPIs also became incrementally less negative on Consumer Staples and Information Technology while maintaining an underweight stance on Consumer Staples and a neutral stance on IT. Among other sectors, FPIs turned more negative on Industrials while maintaining broadly neutral positioning in Consumer Discretionary, Healthcare and Utilities, the report added. (ANI)
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