FPIs pump in over Rs 27k cr in Aug; highest monthly flow since Sept 2024

Foreign portfolio investors (FPIs) have pumped in Rs 27,186 crore ($2.849 billion) so far in August 2026 in the Indian equity markets according to the latest data with National Securities Depository Services Ltd (NSDL), marking the second consecutive month of foreign portfolio investor (FPI) inflows.

The net inflow in August is the highest since September 2024, when FPIs had pumped in Rs 57,724 crore ($6.890 billion) in Indian equities. FPIs turned net buyers for the second straight month. In July, they pumped in Rs 20,200 crore ($ 2.123 billion), data shows.

Of the total FPI buying till August 25, 2026, Rs 15,491 crore was through exchanges and Rs 11,694 crore through the “primary market and others category”.

Indian equities, said Jitendra Gohil, CIO – Listed Equities, Bajaj Alts, have been a beneficiary of the rotation out of the global ‘chip trade’ in markets such as Korea and Taiwan. India, he believes, was a safer bet for FPIs within the emerging markets.

“The other markets were getting overheated as investors piled on to AI-related stocks. I feel a large part of the negativity is over and FPIs may turn to India gradually if the macros remain in order and earnings revive,” he said.

FPIs, according to said V K Vijayakumar, chief investment strategist at Geojit Investments, are not buying large banking or IT stocks, but selectively buying mid-caps despite elevated valuations.

Supported by liquidity, the markets gained ground in August with the mid-cap and the small-cap indices moving up 1.83 per cent and 3.7 per cent, respectively during the month (till August 27). However, the Sensex and the Nifty have fallen 1 per cent each during this period.

“Given India’s improving GDP growth and earnings growth perspective, FPIs are likely to sustain the buying trend. A headwind, however, is the high bond yields in the US which is negative for equities,” Vijayakumar said.

Despite being net buyers for the past two months, FPIs are still net sellers in Indian equities thus far in 2026 with their net sales totalling Rs 2.27 trillion ($24.31 billion) in CY26. In entire CY25, FPIs were net sellers of Rs 1.66 trillion ($1.89 billion).

With the pace of earnings growth strengthening and the breadth of growth improving, Motilal Oswal Financial Services expects the risk-reward profile to become favorable, enhancing India’s attractiveness from an FII perspective.

Word of caution

The domestic market, according to G Chokkalingam, founder and head of research at Equinomics Research, is likely to remain volatile with a downward bias in the near term due to elevated oil prices and a lack of adequate liquidity for the secondary markets.

The Small and mid-cap (SMC) segment, he said, is likely to perform better selectively as compared to the frontline indexes, the Sensex and Nifty; and advises investor stay away from stocks where there is excess valuation.

“The dominance of mutual funds and the entry of new retail investors will give opportunities selectively in the SMC segment. That said, most elevated stocks (valuation-wise) across the market will correct. The liquidity needed to support new themes and newly-listed stocks would come largely by selling stocks investors already hold in their portfolios, rather than through substantial inflows of new money,” he cautions.