FII ownership in Indian equities hits 14-year-low: What's the reason?
What's the story
Foreign institutional investor (FII) ownership in Indian equities has fallen to its lowest level since June 2012, according to a report by JM Financial's Fundamental Research. The report states that FII ownership has declined from 19.9% in April 2016 to 14.7% in April 2026. Meanwhile, domestic institutional investor (DII) ownership has increased to 18.9%. This shift is attributed to steady inflows through systematic investment plans (SIPs).
Market dynamics
DII ownership increases in 39 out of 41 Nifty stocks
The report highlights that DIIs have increased their stake in 39 out of 41 Nifty stocks where FIIs sold. This indicates domestic institutions are buying into every FII exit. Over the last three years, 41 out of 50 Nifty-50 stocks witnessed net FII selling, showing a macro-level decision to lower India allocation.
Sectoral shifts
IT sector sees highest outflow
The report also notes that 10 out of 16 sectors recorded net outflows in the last year. The IT sector saw the highest outflow at $9,222 million, followed by banking, financial services and insurance (BFSI) at $6,056 million and fast-moving consumer goods (FMCG) at $3,744 million. March 2026 was particularly bad for these sectors with BFSI alone seeing $6,488 million in outflows.
Investment trends
Capital goods and telecom see steady inflows
Despite the exits from consumption and financials, there were steady inflows into capital goods ($2,894 million) and telecom ($2,914 million). In April 2026, -ower sector saw FII inflows of $584 million. Notable companies with high FII selling include KPIT Technologies (-12.9%), Axis Bank (-11.7%) and Patanjali Foods (-10.9%). FIIs selectively increased their stakes in firms like 360 ONE (+22.8%), GE Vernova T&D (+17.8%) and One 97 (+7.9%).