Mata Securities India Pvt Ltd | SEBI Registered Research Analyst | Reg. No. INH000022668 | SEBI Registered MF Distributor | ARN-0158
FPI Flows: Two-Month Equity Buying Streak Ends as Selling Returns Across Both Equity & Debt
FPIs Turn Equity Sellers Again After Two Consecutive Months of Buying: FPIs recorded net equity outflows of ₹35,861 Cr in September 2026, ending the buying momentum seen in July and August. Selling remained persistent throughout the month, with FPIs withdrawing ₹14,116 Cr during September 1–15 and a higher ₹21,745 Cr during September 16–30. September became the sixth month of FPI equity selling in CY2026, compared with only three months of net buying — February, July and August, highlighting the continued cautious stance of foreign investors toward Indian equities.
Secondary Market Bears the Brunt of FPI Selling, While IPO Activity Attracts Foreign Capital: The September equity outflow was driven entirely by the secondary market, where FPIs sold ₹45,537 Cr worth of equities. In contrast, FPIs remained net buyers of ₹9,676 Cr in the primary market, supported by continued participation in the active IPO and primary issuance market. This indicates that while foreign investors reduced exposure to listed equities, they continued to selectively deploy capital into new issuances.
FPI Debt Selling Accelerates Sharply for the Second Straight Month: FPIs recorded net debt outflows of ₹20,727 Cr in September, extending debt selling for the second consecutive month after the three-month buying streak ended in August. Selling accelerated sharply from just ₹1,457 Cr in August, with outflows of ₹7,662 Cr in the first half and a significantly higher ₹13,065 Cr in the second half of September. Secondary-market selling remained the key contributor to the pressure on FPI debt flows during the month.
Financial Services Sees Sharp Reversal; Becomes Largest FPI Selling Sector: After leading FPI buying in August, Financial Services reversed sharply in September, recording net selling of ₹13,147 Cr. Selling remained heavy throughout the month, with ₹6,204 Cr in the first half and ₹6,943 Cr in the second half, making it the largest sectoral FPI outflow during September.
Consumer Services and Healthcare Extend Buying Streak; Services Emerges as a Preferred Sector: Consumer Services remained the top FPI buying sector at ₹2,333 Cr, with buying accelerating significantly in the second half. Healthcare continued to attract foreign flows with ₹2,117 Cr of net buying, while Services recorded purchases of ₹2,302 Cr, emerging among the leading FPI buying sectors during the month. Construction also attracted healthy inflows of ₹1,311 Cr.
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