FIIs Invest ₹29,631 Crore In Indian Stocks In August, Mark Highest Monthly Inflow In 23 Months

Foreign Institutional Investors (FIIs) made their strongest monthly investment in Indian equities in nearly two years, acquiring stocks valued at ₹29,631 crore in August 2026, based on data from the National Securities Depository. This figure marked the highest inflow since September 2024 and represented the second consecutive month of foreign buying after a four-month period of selling.

In July, FIIs had invested ₹20,200 crore in Indian equities, helping to reverse some of the ₹49,340 crore outflow that had occurred in June. Collectively, the inflows in July and August amounted to ₹49,831 crore, nearly offsetting the withdrawal from the previous month.

Several factors contributed to the robustness of this FII surge, including the rise of the rupee against the dollar, fueled by strong GDP growth, FPI inflows, and support from the Reserve Bank of India. Additionally, corporate earnings recovery and a stable rupee bolstered investor confidence. Strong earnings growth among Nifty 50 companies, with profit after tax growth reaching its highest level in 10 quarters, prompted brokerages such as Motilal Oswal and PhillipCapital to revise their FY27 earnings forecasts upward.

While foreign investors showed significant interest in Indian equities, the momentum in the debt market appeared to weaken during August. FIIs divested ₹2,224 crore worth of general limit debt securities during the month. Furthermore, investment in government securities under the Fully Accessible Route saw a sharp decline. Foreign investment in FAR bonds specifically dropped to ₹264 crore in August, down from ₹21,652 crore in June.

Despite this cautious behavior in the debt market, overall FII flows remained positive for the third consecutive month, with net foreign inflows reaching ₹25,492 crore in August, compared to ₹40,031 crore in the preceding month. Earlier, FIIs had reduced their exposure to Indian stocks due to concerns over high valuations. However, analysts noted that sustained demand, improving earnings growth, and stable currency conditions had helped rekindle foreign investor interest.