FPIs Pull Rs 20,974 Crore From Equities in September So Far

Foreign portfolio investors have withdrawn Rs 20,974 crore from Indian equities so far in September 2026, reversing two months of buying, as rising crude oil prices, firmer US bond yields and a weaker rupee weigh on sentiment, depository data shows.

FPIs Turn Sellers Again

Foreign portfolio investors pulled Rs 20,974 crore out of Indian equities in the period up to September 18, 2026, according to depository data reported by Press Trust of India. The reversal follows two consecutive months of buying, when foreign investors had put in Rs 20,200 crore in July and Rs 29,630 crore in August. Some datasets tracking flows through the exchanges, drawn from NSDL records up to September 19, put the outflow slightly higher at around Rs 23,676 crore, a difference that mainly reflects different cut off dates and reporting channels rather than a change in direction.

Either figure points to the same underlying shift: after a brief return to buying in the middle of the year, foreign investors have turned net sellers of Indian shares again this month.

What Is Driving the Selling

Analysts attribute the September reversal to a combination of global rather than India specific factors. Elevated crude oil prices raise concerns about India's import bill, inflation trajectory and current account position, all of which can weigh on how foreign investors view emerging market assets generally. Higher US bond yields, at the same time, make dollar denominated assets relatively more attractive, drawing capital away from markets like India.

A weakening Indian rupee compounds the pressure, since currency depreciation can erode returns for foreign investors measured in dollar terms even when local equity prices hold steady. Vedant Gupte, co-founder and chief executive of investment platform Trackk, described the pattern as tied to global conditions rather than anything unique to India, noting that money tends to leave emerging markets broadly when oil prices and US yields rise together.

The Bigger Picture for 2026

With the latest September outflows added in, foreign portfolio investors have now pulled a total of about Rs 2.45 lakh crore from Indian equities so far in 2026. That already exceeds the roughly Rs 1.66 lakh crore withdrawn across the entirety of 2025, underlining how much heavier this year's foreign selling has been.

The scale of the 2026 outflow so far reflects a year that saw heavy selling between March and June, according to separate monthly data, before July and August offered a temporary reprieve. September's reversal has raised questions among market participants about whether that mid year recovery in sentiment was durable or simply a pause within a longer selling cycle.

Primary Market Stays Resilient

Despite the pressure in the secondary market, where existing shares change hands, foreign investment through India's primary market, meaning new share offerings such as IPOs, has continued at a healthier pace. Large, well marketed public issues can still draw foreign capital even when the broader cash market is seeing net selling, since investors sometimes ring fence allocations for specific new listings they view favourably.

This divergence helps explain why India's IPO pipeline has stayed active through a month otherwise marked by foreign selling in listed stocks. It also suggests the September outflow, while notable in scale, is not necessarily a blanket retreat from India so much as a rotation away from existing holdings toward selective new opportunities.

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What Investors Should Watch

FPI flows are likely to stay sensitive to the same global variables going forward: the trajectory of crude oil prices, movements in the US 10-year Treasury yield, and any shift in geopolitical risk affecting energy markets. Domestic institutional investors have continued to provide some offsetting support during the recent selling, cushioning the impact on headline indices even as foreign flows turn negative.

Readers should treat month to month FPI data as one input among several when assessing market direction, rather than a standalone signal, since foreign flows can reverse quickly once global conditions shift.