Shift in Market Dynamics: FPIs Hit 15-Year Ownership Low

Foreign portfolio investors (FPI) ownership in NSE-listed companies fell to 16.9% by September, marking a 15-year low. In contrast, domestic mutual fund ownership reached 10.9%, marking a nine-quarter growth streak. Individual investor holdings, including mutual funds, hit a 22-year high of 18.75%. Amidst shifts in sector preferences, household equity wealth fell in Q2 FY26.

The ownership of foreign portfolio investors (FPIs) in NSE-listed companies fell to 16.9% by the end of September, the lowest in 15 years, according to data released by the largest stock exchange. This marks a notable shift in market dynamics as domestic mutual funds have climbed to 10.9%, continuing a nine-quarter growth streak supported by systematic investment plans (SIP).

Individual investors maintained their holdings steady, but when combined with mutual fund assets, their contribution reached 18.75% of the market, the highest in 22 years. Meanwhile, promoter holdings remained stable at 50.1% for all companies, yet dropped to a 23-year low of 40% in the benchmark Nifty50 stocks.

Despite a robust cumulative gain in household equity wealth since April 2020, the Q2 FY26 figures saw a decline of approximately Rs 2.6 lakh crore. Sector preferences also shifted, with FPIs remaining overweight in financials while showing caution in commodities. Domestic mutual funds have also adjusted their focus, emphasizing financials and consumer discretionary sectors.

(With inputs from agencies.)