FPI Flows in August 2026 So Far: Financials, Autos and IT Lead Foreign Buying

Written by Finnovate

Content Team

Foreign investors are buying Indian equities again.

After investing about ₹20,200 crore in July 2026, Foreign Portfolio Investors (FPIs) had already put another ₹23,544 crore into Indian equities in August as of August 23.

That makes August the second consecutive month of net foreign buying after four months of heavy selling between March and June.

But the comeback is not happening evenly across the market.

The ₹23,544 crore figure is the latest month-to-date number. The detailed sector-wise breakdown below covers August 1 to August 15, when FPIs were net buyers of about ₹16,621 crore, or $1.74 billion.

FPI buying has already exceeded July's full-month inflow

The turnaround began in July.

FPIs had withdrawn heavily from Indian equities during the preceding four months:

• March: -₹1.17 lakh crore
• April: -₹60,847 crore
• May: -₹32,963 crore
• June: -₹49,340 crore

July finally broke that selling streak with around ₹20,200 crore of net equity inflows.

By August 23, FPIs had already invested ₹23,544 crore, exceeding the entire July total.

So the recovery is not limited to secondary-market buying. Foreign investors are also participating meaningfully in India's primary market.

Where did FPIs invest in the first half of August?

For August 1 to August 15, FPIs were net buyers of approximately $1.74 billion in Indian equities.

That was slightly higher than the comparable first-half July inflow of about $1.62 billion.

13 of the 23 reported sector buckets attracted net FPI buying, nine saw selling and one was flat.

The positive-flow sectors collectively attracted around $2.55 billion, while approximately $805 million of selling elsewhere reduced the overall net inflow to $1.74 billion.

Financials, autos and consumption led the domestic-facing trade

The biggest FPI allocation was to Financial Services, with net buying of about $685 million, or roughly ₹6,535 crore.

This was a notable reversal because FPIs had sold financial stocks in the second half of July.

Automobiles were the second-largest buy at approximately $462 million.

The common thread is India's domestic economy.

Improving corporate earnings, relatively resilient consumption and expectations of continued economic growth appear to have made domestic-facing sectors more attractive again.

That does not mean FPIs are making one broad consumption bet. But the August data clearly shows that foreign buying is not restricted to export-oriented sectors.

IT and healthcare added a global and relative-value angle

Two globally exposed sectors also attracted meaningful foreign money.

• Healthcare: +$305 million
• Information Technology: +$265 million

Together, they received around $570 million.

The IT trend is particularly interesting because foreign investors had already bought Indian technology stocks in the second half of July before adding again in the first half of August.

One possible reason is relative valuation.

The global AI and semiconductor trade had become extremely crowded in markets such as South Korea and Taiwan. As investors reassessed some of those expensive positions, India began to look relatively different because its market is less dependent on a narrow group of AI-linked companies.

Healthcare, meanwhile, offers a combination of domestic growth and global earnings exposure, which can be useful when macroeconomic uncertainty remains elevated.

Why are FPIs returning to India now?

There is unlikely to be one single reason. Several conditions have improved simultaneously.

1. Corporate earnings have improved

Q1 earnings have provided foreign investors with better visibility on company growth after a weaker market phase earlier in 2026.

That matters because overseas investors compare India not only with its own history, but also with earnings and valuations available across other emerging markets.

2. Relative valuations have become more reasonable

Indian equities remain expensive in several pockets, but the earlier 2026 correction reduced some of the valuation gap versus competing markets.

That has allowed FPIs to return selectively rather than buying the entire market.

3. India's external buffer has improved

Currency risk matters to every foreign investor.

A stock can generate a positive rupee return and still produce a disappointing dollar return if the rupee weakens sharply.

The RBI's foreign-currency mobilisation measures, including the special FCNR(B)-linked swap programme, have strengthened India's external buffer.

4. Global portfolios are becoming less concentrated around AI

Concerns around stretched AI-related valuations have encouraged some global investors to reconsider portfolio concentration.

India offers a very different earnings mix, including banks, consumption, healthcare, autos and domestic services.

That diversification can become more attractive when one global investment theme becomes crowded.

Where are FPIs still selling?

The foreign buying story is not universal.

Telecom was by far the largest sell.

There are several possible explanations, including valuations and portfolio rotation, but the sector data itself does not establish why FPIs sold.

The upcoming Jio Platforms IPO could become an important allocation event for institutional investors, but it would be too strong to conclude that foreign investors are already selling listed telecom stocks specifically to fund that IPO.

Similarly, selling in capital goods, power and realty should not automatically be interpreted as FPIs losing faith in India's capex cycle.

Is this finally a sustained FPI comeback?

Two consecutive months of buying are encouraging.

July brought around ₹20,200 crore.

August had already added ₹23,544 crore by August 23.

And the first half of August marked another positive fortnight for foreign equity flows.

But the bigger 2026 picture still matters.

Despite the July-August recovery, FPIs remain net sellers of roughly ₹2.3 lakh crore of Indian equities in 2026 so far.

There are also important risks still in play:

• Elevated crude oil prices
• Middle East geopolitical risks
• Higher global bond yields
• Premium valuations in parts of the Indian market
• A large pipeline of IPOs and institutional placements competing for capital

So it would be premature to say the FPI cycle has permanently turned.

If earnings remain supportive, the rupee stays relatively orderly and foreign buying continues beyond a few leading sectors, July and August may eventually look like the start of a more durable reversal.

If oil, yields or geopolitical risks worsen again, the comeback could remain fragile.

FAQs

1. How much have FPIs invested in Indian equities in August 2026?

FPIs had invested approximately ₹23,544 crore in Indian equities in August 2026 as of the latest available data on August 23.

2. How much did FPIs invest in the first half of August?

Between August 1 and August 15, FPIs were net buyers of about ₹16,621 crore, or $1.74 billion, in Indian equities.

3. Which sectors received the highest FPI inflows in August?

For August 1-15, Financial Services led with about $685 million of net buying, followed by Automobiles at $462 million, Consumer Services at $356 million, Healthcare at $305 million and IT at $265 million.

4. Which sectors saw the most FPI selling?

Telecommunication saw the largest first-half August outflow at about $348 million, followed by Capital Goods, Power and Realty.

5. Are FPIs net buyers of Indian equities in 2026?

Not yet on a year-to-date basis. Despite strong buying in July and August, FPIs remain net sellers of roughly ₹2.3 lakh crore of Indian equities during 2026 so far.

Disclaimer: This article is for educational and informational purposes only and should not be treated as investment advice. FPI flows can change rapidly in response to currency movements, global interest rates, valuations, earnings and geopolitical developments. Investors should make portfolio decisions based on their goals, time horizon, asset allocation and risk profile.