Even when foreign investors (FPIs) were pulling money out of Indian markets overall, they actually increased their holdings in midcap stocks to the highest level in years by Dec’25. This shows they still see long-term value in quality midcaps.
However, in Jan’26, FPIs sold heavily (₹36,000–41,000 crore), mainly due to global factors like high interest rates, strong dollar, and risk-off mood. Right now, Indian markets are being supported by domestic investors (DIIs) and retail investors.
Will FPIs return after the Budget?
Possibly – but FPIs usually look at three big things before turning buyers:
– Government’s fiscal discipline & reform direction in the Budget
– India’s growth outlook vs global slowdown
– Global interest rate cycle (US Fed)
Bottom line:
FPIs move with global money flows, not emotions. DIIs + retail are providing stability.
Smart investors focus on long-term fundamentals, not short-term FPI flows.
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