New Delhi, September 5 (HS): The share of foreign investors in Indian equities has fallen to its lowest level in 13 years amid persistent global pressures and tariff-related uncertainties. Data for August shows that foreign portfolio investors (FPIs) continued to offload Indian assets, while domestic institutional investors (DIIs) steadily increased their presence to record levels.

According to figures from the National Securities Depository Limited (NSDL), the value of foreign portfolio assets in India declined to ₹70.33 lakh crore in August, down from ₹71.97 lakh crore a month earlier — a drop of about 2.3%. Consequently, the FPI share in the Indian stock market fell to 15.85% by the end of August, marking the lowest level since 2012.

In contrast, domestic institutional investors have emerged as a stabilizing force, raising their shareholding in equities to a historic 17.82%, the highest ever recorded. From January to August, FPIs have withdrawn about ₹1.7 lakh crore from the markets, while DIIs have infused more than ₹5.2 lakh crore, consistently acting as net buyers.

Market analysts note that this structural shift signals a diminishing dependence of Indian equities on foreign capital flows. “The widening gap between foreign and domestic investors shows that Indian markets are no longer at the mercy of overseas players,” said Tarkeshwar Nath Vaishnav, CEO of TNV Financial Services.

Despite heavy FPI outflows, frontline indices such as the Sensex and Nifty have risen nearly 4% this year, largely owing to the steady inflows from domestic investors. Experts believe that without this counterbalancing support, foreign selling could have severely destabilized Indian markets.

“This growing dominance of domestic institutions is a healthy sign for the future of India’s capital markets and overall economy,” Vaishnav emphasized.

—————

Hindusthan Samachar / Jun Sarkar