Foreign investors are flocking back to India’s bustling stock exchanges, injecting over $2 billion in the last nine days and igniting a broad-based rally. This FII revival, coupled with aggressive domestic buying, signals a maturing market less swayed by overseas whims.
On February 9, FIIs scooped up Rs 2,223 crore in net purchases, per exchange data. While welcome, analysts advise caution on sustainability, hinging on global stability, profit growth, and a softer dollar. DIIs, however, have been unwavering, acquiring Rs 8,973 crore worth of equities in the same timeframe.
Nifty 50’s ownership dynamics have shifted dramatically—domestics now lead FIIs, propelled by SIP surges, retail boom, and institutional steadiness from insurers and pensions. External factors like geopolitical risks and Fed rate hikes had sidelined foreigners earlier.
Morningstar’s Himanshu Shrivastava emphasizes, “Homegrown flows create a stable base, curbing FII dependency and buffering against international turmoil.” Attractive valuations post-correction, relative to Asia, and trade deal progress with the US are drawing FIIs anew.
Benchmarks reflected the enthusiasm: Sensex and Nifty +3%, Midcap 150 +5.66%, Smallcap 250 +6.3%. Supportive RBI policy, GDP uptick, robust earnings forecasts, and deepening domestic pools promise sustained FII interest. Motilal Oswal data shows DII Nifty stake at 24.8% vs FIIs’ 24.3% in late 2025, marking eight-quarter FII lows and a durable domestic edge.