Foreign portfolio investors (FPIs) have invested a net USD 8.2 billion in Indian equities since mid-October 2026, marking a turnaround after nearly two years of heavy selling, according to a report by global brokerage Jefferies.
In its India Equity Strategy report titled “Where Could a Revival in FPI Flows Go?”, Jefferies said, “After persistent selling, FPI flows have turned positive recently, with US$8.2bn net inflows since mid-Oct.”
Of the total inflows, USD 5.8 billion came in just six trading sessions in November, according to data cited in the report up to November 6.
The recovery follows sustained foreign investor selling, with FPIs withdrawing around USD 61 billion from Indian equities between September 2024 and October 2026. The first 10 months of 2026 saw outflows of USD 31 billion.
However, despite the recent return of foreign investors, their overall ownership in Indian equities remains at historically low levels.
“FPI ownership in BSE500 stocks has fallen to lowest level in last 10 years to 17.3%, which was at 19.6% as on Sep’24,” Jefferies said.
The brokerage’s analysis of 70 large active emerging-market funds, managing a combined USD 370 billion, showed that 61 per cent of these funds were underweight on India as of September 2026, meaning their exposure was below India’s weight in the benchmark index.
“Overall FPI positioning remains light,” the report said.
It added that India’s average overweight position in these funds stood at just 0.1 percentage points, compared with the 10-year average of 2.2 percentage points, indicating room for foreign investors to increase their investments.
Jefferies identified several factors that could support continued inflows, including a possible shift in global investments away from artificial intelligence-related stocks, easing crude oil prices, potential equity tax relief and resilient domestic economic conditions.
The brokerage also highlighted healthy festive-season automobile sales, strong power demand and credit growth as factors supporting India’s economic outlook.
On valuations, Jefferies said the Nifty 100 was trading at around 18.6 times its estimated earnings for the next 12 months, approximately 5 per cent below its 10-year average.
“Large caps could be the cleaner play on an FPI return,” the brokerage said, noting that larger companies could benefit more directly from a sustained recovery in foreign investment flows.
