Even as foreign institutional investors (FIIs) have slashed their concentration in India's marquee blue-chip stocks to nearly half of what it was four years ago, they have quietly expanded the number of Indian stocks they hold stakes in from roughly 900 to 1,300. Foreign investors are piling into capital goods, manufacturing, defence, healthcare and new-age tech, sectors where the action is predominantly in mid- and small-cap stocks.
The aggregate FPI holding of Indian stocks has ebbed to roughly 15%, down from 20% a decade ago. But within that retreat lies a structural repositioning as the top 10 Nifty stocks, which once accounted for 40.9% of all FPI holdings in India, now command just 21.3%. The money is moving down the market-cap ladder, chasing growth in corners of the Indian economy that global investors once largely ignored.
