FPI ownership in both Nifty 50 and Nifty 500 companies fell further in the September quarter, declining 43 basis points (bps) and 46 bps sequentially to 13-year lows of 24.1% and 18%, respectively—signalling broad-based selling across large and midcap segments.
The downward trend in FPI holdings has been persistent since March 2023, reflecting the volatility in foreign capital flows. The first half of FY26 continued this pattern, with the FPI share in NSE-listed companies dropping 63 bps to 16.9%—the lowest level in more than 15 years. This decline was driven by net FPI outflows of $8.7 billion during the quarter. In value terms, FPI holdings in NSE-listed companies fell 5.1% quarter-on-quarter to Rs 75.2 lakh crore as of 30 September 2025, even though the aggregate value has grown at a robust annualised rate of 17% over the past two decades.
FPIs maintained their overweight position in financials and further increased exposure to communication services. However, they remained cautious on consumption and commodity-linked sectors such as consumer staples, energy, and materials, sustaining an underweight stance. They also continued to hold a negative view on industrials and turned mildly bearish on information technology. Among other sectors, FPIs stayed largely neutral on consumer discretionary—with a slight positive bias following recent GST measures—as well as on healthcare, utilities, and real estate.
On the other hand, domestic mutual funds (DMFs) continued to hit new highs across all market segments in September, marking the ninth consecutive quarter of record ownership, supported by steady equity inflows. DMFs invested Rs 1.64 lakh crore in Q2FY26—their 18th straight quarter of positive flows—boosting their ownership to record levels of 13.5% in the Nifty 50, 11.4% in the Nifty 500, and 10.9% in all NSE-listed companies. This consistent rise pushed domestic institutional investors (DIIs)—which include DMFs, banks, financial institutions, insurance firms, and other non-promoter institutions—to a record 18.7% ownership in NSE-listed firms, surpassing FPI ownership for the fourth consecutive quarter after a gap of 21 years.
Meanwhile, the share of individual investors in NSE-listed companies remained steady, ranging between 9.5% and 9.8% over the past nine quarters. It stood at 9.6% as of September 2025, broadly unchanged on a sequential basis. This stability was underpinned by renewed net inflows from retail investors during the quarter, amounting to Rs 20,469 crore (US$2.4 billion). Interestingly, when excluding the top 10% of companies by market capitalisation, individual investors’ ownership rose 48 bps sequentially to a 19-year high of 16.7%, highlighting their growing preference for midcap and smallcap stocks. Also read | Tata Motors CV hits top gear on debut post demerger. Here are 7 takeaways from the listing
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