In a dramatic turnaround, Foreign Institutional Investors flooded Indian markets with $2.44 billion in net purchases last February—the most aggressive monthly bet in 17 months, topping September 2024 levels. Breaking it down, $2.14 billion targeted secondary equities, complemented by $299 million in new issues.
This bucks a tough stretch: steady primary buys since October 2023 contrasted with $46 billion+ secondary outflows from January 2024 to December 2025. The February rally kicked off post a $1.21 billion IT sell-off, hinting at bargain hunting amid volatility.
Caution flags are up. Analysts warn this inflow, though robust, is modest versus past exits and could prove ephemeral if IT pressures persist. On the flip side, moderated valuations across boards lessen crash risks, fostering guarded optimism.
Indices mirrored the fervor. Sensex gained 1.08%, Nifty 2.05%, with midcaps (4.72%) and smallcaps (5.10%) leading the charge last month. A new outlook predicts Nifty at 27,958 in 12 months, propelled by clear policies, blockbuster trade agreements, and unrelenting infra focus.
Big-ticket items like India-EU FTA negotiations promise to ignite the next growth phase. Financial sectors eye 13-14% credit normalization and pristine asset quality for tailwinds. Capital-intensive plays in engineering and goods sectors gear up for infra-defense windfalls.
February’s FII fiesta spotlights India’s enduring appeal. As global capital circles back, stakeholders ponder if normalized pricing and structural tailwinds will sustain the momentum into a broader recovery.