FPIs Return, But Not Enough Yet

How much of the ₹2.31 lakh crore has actually come back?

Foreign investors sold ₹2.74 lakh crore of Indian stocks between January and June 2026, then started buying back in July (₹20,200 crore) and August (₹23,544 crore). Add it up and only about ₹43,744 crore has returned, leaving the year-to-date total still negative at ₹2.31 lakh crore, roughly five times what has come back so far.

Is the money going into stocks already trading or new listings?

Of the ₹23,544 crore that came back in August (through August 21), ₹14,117 crore went through the stock exchanges buying existing shares, while ₹9,426 crore went through the primary market, meaning IPOs and similar new-issue routes, showing foreign buyers are still cautious about existing stocks.

Why would fleeing AI stocks send money to India?

For months, foreign investors sold Indian stocks to chase a handful of AI names like Nvidia and Microsoft in the US, Korea and Taiwan, where earnings made emerging markets look like a poor bet in comparison. Now those AI valuations have become stretched. As Equirus Securities' Vishad Turakhia put it, investors looking to exit that trade want an 'anti-AI trade' place to park money, and India fits that description.

Was this AI-driven selling unique to India or global?

It hit emerging markets broadly. Analysts describe it as a global risk-off rotation, not a rejection of India specifically. Capital concentrated in a few US, Korean and Taiwanese tech stocks because their earnings made the extra risk of holding emerging-market assets, currency swings, regulatory uncertainty, harder to justify. Mohit Gulati of ITI Growth Opportunities Fund called it 'the opportunity cost of not being overweight US tech.'

Has this AI-driven capital rotation happened before?

Yes. Analysts point to the dot-com build-out and the post-financial-crisis recovery as earlier cycles where global capital gravitated toward high-conviction US trades, only to reverse once those trades peaked and valuations became unjustifiable. The pattern suggests today's AI-driven pull from markets like India is cyclical rather than a permanent judgment on India's fundamentals, which analysts say remain intact.

What would actually reverse the AI trade for good?

A correction in AI-linked stock valuations, which analysts already see as stretched to levels 'hard to justify.' Once that trade runs out of steam, capital is expected to rotate back toward emerging markets including India. Until AI valuations actually crack, the pull toward those stocks, and the pressure on India, continues regardless of how strong India's own earnings look.

Does money chasing IPOs count as betting on India?

Not automatically. Of the ₹23,544 crore foreign investors put in, ₹9,426 crore went through IPOs and other primary-market deals, not into buying existing shares on the exchange. Some of that is money chasing a specific new listing, like Jio Platforms or NSE, rather than a broader judgment that Indian stocks generally deserve more foreign money.

What are the big IPOs foreign investors are targeting?

Jio Platforms filed papers for a fully fresh share sale of 27 crore shares, valuing it near ₹12-13 lakh crore, mainly to repay ₹70,781 crore of debt and fund AI and digital infrastructure. NSE's planned listing is different: existing shareholders, including public banks and insurers, would sell their own shares, so the exchange itself raises no new money.

Why would an IPO purchase not reflect confidence in India broadly?

An IPO purchase is a bet on one company's price and story, decided share by share, not a decision to raise exposure to Indian equities in general. NSE's sale, for instance, is a pure ownership handover, old shareholders cashing out gains built up over years, with the exchange itself receiving nothing from the sale.