@ZerodhaVarsity: FIIs have pulled over ₹2,87,00...

FIIs have pulled over ₹2,87,000 Cr from Indian equities in 2026 so far.

Nearly half of that selling has come from a single sector.

At the same time, foreign investors have steadily increased exposure to a handful of others.

Here's what the data reveals. 🧵

Foreign Institutional Investors (FIIs) include foreign pension funds, sovereign wealth funds, hedge funds, and asset managers.

They pool capital from investors abroad and allocate it across global markets, including India.

When they buy Indian securities, it appears as an FII inflow. When they sell, it appears as an outflow.
(2/12)

FII flows are influenced by decisions made at multiple levels.

Before choosing individual Indian stocks, FIIs decide how much capital to allocate to India relative to other markets.

India, therefore, competes for capital alongside countries such as the US, China, South Korea, Vietnam, and many others.
(3/12)

Once capital is allocated to India, the next allocation decision is at the sector level.

The heatmap tracks net FII flows across sectors every fortnight during 2026.

Each cell represents net money flow for that period.
🟥 Dark red indicates net selling.
🟩 Dark green indicates net buying.
(4/12)

Financial Services has recorded the largest net outflow in 2026 so far.

FIIs have sold approximately ₹1,26,000 Cr from the sector.

The outflow was not concentrated in a single period.
Selling has occurred across most fortnights during the year.
(5/12)

FIIs were net sellers of Indian equities overall.

While some capital was reallocated to sectors such as Sovereign Bonds, Capital Goods, and Metals & Mining, a significant amount of capital left the market entirely.

The largest inflows were:
→ Sovereign Bonds: +₹30,000 Cr
→ Capital Goods: +₹23,000 Cr
→ Metals & Mining: +₹17,000 Cr

This movement of money between sectors is known as sector rotation.
(6/12)

Sector-level flow data provides additional context beyond aggregate inflow and outflow numbers.

Aggregate flows show how much capital entered or left the market.

Sector-level flows show where that capital was allocated.

Both perspectives help explain investor positioning. (7/12)

The broad pattern in 2026 has been a reduction in exposure to Financials, IT, Autos, and FMCG.

At the same time, FIIs increased allocations toward Sovereign bonds, Capital Goods, and Metals.

The reasons can vary and may include valuations, earnings expectations, economic conditions, and global market developments.
(8/12)

One sector that stands out is Sovereign debt.

FIIs have allocated nearly ₹30,000 Cr to the sector in 2026.

In June, the government introduced reforms to increase foreign participation in Government Securities (G-Secs), including tax exemptions on interest income and capital gains, an expansion of the Fully Accessible Route (FAR), and the removal of several investment restrictions.

These changes were aimed at attracting more foreign capital into India's debt market.
(9/12)

The most recent fortnight continued several trends that have been visible throughout the year.

Some of the largest sectoral outflows YTD have happened in the last fortnight:

→ Automobile & Auto Components: -₹9,000 Cr
→ Financial Services: -₹7,800 Cr
→ Information Technology: -₹6,700 Cr
→ Fast Moving Consumer Goods: -₹5,100 Cr
These sectors have experienced repeated selling across multiple fortnights in 2026.

(10/12)

In several sectors, strong inflows coincided with strong performance.

In others, returns and flows moved in different directions.

Flows are one of several variables that influence market outcomes.
(11/12)

FIIs are one of several major participants in Indian financial markets.

Because they manage large pools of capital, their allocation decisions can provide useful information about how money is moving across sectors.

The underlying data is published fortnightly by NSDL and CDSL and is freely available to the public.
(12/12)