Foreign Portfolio Investors Offload Rs 7,443 Crore in Equities During First Week of September.

In a notable shift, foreign portfolio investors (FPIs) transitioned from net buyers to net sellers in Indian equities during the first week of September, withdrawing Rs 7,443 crore. This trend follows their strong investments of over Rs 29,600 crore in August and Rs 20,200 crore in July, as reported by the National Securities Depository Limited (NSDL). The recent withdrawals highlight growing concerns surrounding India’s inflation and current account dynamics, which have been exacerbated by a rebound in crude oil prices and an uptick in US bond yields.

The increased selling pressure from FPIs follows a cumulative outflow that has now reached Rs 2.32 lakh crore in 2026, surpassing the Rs 1.66 lakh crore withdrawn throughout 2025. Analysts, including Rajkumar Rathi from YES Securities, attribute the current risk-off sentiment to India’s elevated equity valuations, particularly within the growth sectors and mid- to small-cap segments. This environment has led foreign investors to opt for profit-taking and portfolio rebalancing, signaling a cautious outlook for short-term foreign investment in Indian equities.

Despite the recent outflows, the primary market remains resilient, fueled by a robust pipeline of upcoming IPOs. Rathi notes that if these initial public offerings (IPOs) are priced attractively, they can sustain foreign capital inflows into the primary market even amid secondary market net selling. Additionally, analysts highlight that external factors such as global bond yields, Brent crude prices, and geopolitical developments will significantly influence future FPI flows, as these elements directly affect investor sentiment regarding emerging markets.

Source: The Economic Times

(Expert Note: This intelligence brief was structured and verified by the Wealthova editorial desk.)