Foreign institutional investors (FIIs) are pulling money out of India’s secondary market at an accelerating pace, but their India strategy is far from a complete retreat. FIIs have withdrawn nearly Rs 2.8 lakh crore from listed stocks so far in 2026, even as they have invested more than Rs 47,000 crore in initial public offerings (IPOs).
The divergence points to a shift in how global funds are gaining exposure to India. Rather than buying existing stocks in the open market, FIIs are increasingly using IPOs to access new sectors, secure large allocations at predetermined prices and avoid pushing up the cost of their own purchases.
