Foreign institutional investors offloaded shares worth ₹2,20,129 crore in Indian equities this year, the largest exodus on record per National Securities Depository Limited data. Yet Ace Equity data reveals FIIs ended the March quarter as net buyers in 36 NIFTY 500 companies. This selective buying underscores pockets of confidence amid broader market pressures.

Record Outflows Mask Targeted Investments

FIIs dumped ₹28,160 crore worth of shares this month alone and ₹1.31 lakh crore in the fourth quarter of financial year 2025-26. Such heavy selling reflects global factors like rising US interest rates and geopolitical tensions diverting capital from emerging markets. Still, their net purchases in 36 firms signal rigorous stock-picking, where deep research identifies resilient businesses.

Market participants view FII stake increases as validation. These global players-hedge funds, pension funds, sovereign wealth funds-deploy sophisticated analysis on management, finances, and growth prospects before committing capital. Rising ownership thus boosts domestic investor sentiment and often supports share prices.

Standout Performers in FII Portfolios

Hitachi Energy India drew the sharpest FII interest, with ownership climbing to 11.68% from 4.96% a year earlier. Stakes rose steadily from 9.67% in September and 10.69% in December, coinciding with a 32% stock surge in the March quarter. The heavy electrical equipment maker benefits from India's infrastructure push.

Vishal Mega Mart saw FII holding reach 22% from 7%, with consistent quarterly gains to 15.4% in Q2 and 15.52% in Q3. Government of Singapore and Monetary Authority of Singapore anchor major positions. Ashok Leyland's stake hit 24.57% from 23.5%, backed by T. Rowe Price, Government Pension Fund Global, and Government of Singapore.

GMR Airports lifted FII ownership to 20.19% from 15.09%, up from 18.96% in December. Goldman Sachs Trust II and GQG Partners Emerging Markets Equity Fund hold key stakes. Union Bank of India rounded out top movers, with FII share at 9.37% from 7.12%.

Broad Spectrum of FII Favorites

The 36 companies span sectors, from autos and energy to finance and retail. Home First Finance Company India topped with 45.72% FII ownership, up from 35.96%. UPL Ltd followed at 41.78% from 34.22%.

• Force Motors Ltd.: 10.93% (from 8.36%)
• Hindustan Petroleum Corporation Ltd.: 17.26% (from 12.55%)
• Steel Authority of India Ltd.: 5.01% (from 3.21%)
• Grasim Industries Ltd.: 14.91% (from 13.45%)
• Cummins India Ltd.: 20.77% (from 17.21%)

Others include Bharat Petroleum (19.57%), GE Vernova T&D India (20.39%), and Polycab India (18.21%). This diversity highlights FII bets on cyclical recovery, infrastructure, and consumer spending amid India's economic expansion.

Implications for Indian Markets

Selective FII inflows counterbalance outflows, stabilizing select stocks and hinting at undervalued opportunities. For companies, higher FII stakes enhance governance scrutiny and long-term focus. Investors watch these moves closely, as they often precede broader rallies when macro headwinds ease.