Foreign portfolio investor (FPI) ownership has fallen to multi-year lows in nearly 70% of India’s top 100 listed companies, reflecting a sustained reduction in overseas exposure to Indian equities. The decline has been particularly pronounced among large companies in the banking and information technology sectors, according to an analysis reported by The Economic Times on November 3, 2026. Several major companies have seen foreign ownership reach levels not recorded in more than 15 or even 20 years.
The trend comes after nearly two years of selling by overseas investors, who have increasingly shifted capital towards markets offering stronger earnings growth and greater exposure to artificial intelligence. However, the decline does not represent a complete withdrawal from India. Foreign investors have continued participating in selected primary-market offerings and block deals, while some returned as net buyers during the September quarter of 2026. The changing ownership pattern suggests that overseas funds are becoming more selective about Indian stocks and the valuations they are willing to pay.
Foreign Ownership Falls Across Nearly 70% of Top Companies
The Economic Times analysis found that foreign investor holdings in nearly 70 of India’s top 100 companies have reached multi-year lows.
The decline has affected several sectors, but large banking and technology companies have experienced particularly significant reductions.
Among the companies where foreign ownership has fallen to levels not seen in more than two decades are:
- Godrej Consumer Products
- Jindal Steel
- Maruti Suzuki
- Dr. Reddy’s Laboratories
- Adani Enterprises
- HCL Technologies
- Tata Consultancy Services (TCS)
Another group of companies has recorded foreign ownership at more than 15-year lows. These include:
- DLF
- Reliance Industries
- Bajaj Holdings & Investment
- UltraTech Cement
- Kotak Mahindra Bank
- Axis Bank
- Trent
- Eicher Motors
- Britannia Industries
- Shriram Finance
The decline is not limited to these companies. Foreign ownership in several other large businesses, including ICICI Bank, HDFC Life Insurance, Larsen & Toubro, Mahindra & Mahindra and Tata Consumer Products, has fallen to levels last seen seven to eight years ago.
IT and Banking Stocks Face Significant Foreign Selling
India’s largest information technology companies have experienced substantial reductions in overseas ownership.
Technology companies have faced changing global investment preferences as international funds increasingly direct capital towards artificial intelligence-related businesses, particularly in Taiwan and South Korea.
Foreign ownership in Tata Consultancy Services and HCL Technologies has fallen to levels not recorded in more than two decades.
The banking sector has also experienced a reduction in foreign stakes. Companies including Axis Bank, Kotak Mahindra Bank and ICICI Bank have seen overseas ownership decline over the years.
Financial services companies are an important component of foreign institutional portfolios because of their size, liquidity and representation in major stock market indices.
When international funds reduce their exposure to Indian equities, large banks and technology companies can become important sources of liquidity because their shares are actively traded.
Why Are Foreign Investors Reducing Their India Exposure?
Several factors are contributing to the decline in foreign ownership.
1. Global Investors Are Moving Towards AI-Driven Markets
One of the major reasons behind the shift is the growing global investment interest in artificial intelligence.
Taiwan and South Korea have benefited from international demand for semiconductor manufacturers and companies supplying the AI infrastructure ecosystem.
As investors increase exposure to these businesses, India’s relative weight in emerging-market investment portfolios has declined.
India’s share of the MSCI Emerging Markets Index has fallen from approximately 20% at its 2024 peak to around 11%, according to the figures cited by The Economic Times.
Taiwan and South Korea together now account for nearly half of the index.
The change matters because many international investment funds use benchmark indices to determine how much capital to allocate to individual countries.
A lower index weight can lead passive funds and benchmark-conscious investors to reduce their holdings in Indian stocks.
2. Earnings Growth Is Slower Than in Some Global Markets
Corporate earnings growth is another important consideration.
Investors compare the expected profits of companies across different markets before deciding where to deploy capital.
According to estimates cited in the Economic Times report, earnings of companies in the S&P 500 are expected to grow approximately 33% in calendar year 2026, compared with projected Nifty earnings growth of around 14% to 15% in FY27.
This difference has influenced international investors seeking faster earnings growth.
However, the two figures cover different reporting periods and market compositions, so they should be treated as broad comparisons rather than directly equivalent measures.
3. Valuation Concerns Make Indian Stocks Less Attractive
Indian equities have historically traded at a valuation premium compared with several emerging markets.
Investors have been willing to pay higher prices for Indian companies because of their growth potential, return on equity and domestic consumption opportunities.
However, when earnings growth slows or valuations remain elevated, overseas investors may find opportunities elsewhere.
The combination of relatively expensive valuations and stronger earnings expectations in other markets has encouraged some funds to reduce their Indian exposure.
4. Passive Funds Are Adjusting Their Portfolios
Not all foreign selling reflects a negative view of individual Indian companies.
Some of the reduction is linked to changes in benchmark index weights.
When India’s representation in global emerging-market indices declines, passive investment funds may automatically reduce allocations to Indian stocks.
This can create additional selling pressure even when the underlying businesses have not experienced a major change in their operations.
Foreign Ownership in Major Indian Companies
The decline in overseas ownership has been particularly visible in several well-known companies.
| Company | Foreign ownership trend |
|---|---|
| Godrej Consumer Products | More than 20-year low |
| Jindal Steel | More than 20-year low |
| Maruti Suzuki | More than 20-year low |
| Dr. Reddy’s Laboratories | More than 20-year low |
| Adani Enterprises | More than 20-year low |
| HCL Technologies | More than 20-year low |
| Tata Consultancy Services | More than 20-year low |
| Reliance Industries | More than 15-year low |
| Axis Bank | More than 15-year low |
| Kotak Mahindra Bank | More than 15-year low |
| Trent | More than 15-year low |
The figures refer to historical lows in foreign ownership, not necessarily the lowest share prices or weakest financial performance of these companies.
A decline in foreign shareholding also does not automatically indicate that a company has deteriorating fundamentals. Ownership patterns can change because of portfolio rebalancing, valuations and differences in investment preferences.
Foreign Investors Return as Net Buyers in September Quarter
Despite the longer-term decline in foreign ownership, overseas investors returned as net buyers of Indian equities during the September 2026 quarter.
According to a separate Mint analysis, foreign portfolio investors invested a net ₹13,970 crore during the quarter.
This followed substantial withdrawals in the preceding quarters:
| Period | FPI investment in Indian equities |
|---|---|
| March quarter 2026 | Net outflow of ₹1.31 lakh crore |
| June quarter 2026 | Net outflow of ₹1.43 lakh crore |
| September quarter 2026 | Net inflow of ₹13,970 crore |
| October 2026 | Net outflow of ₹34,843 crore |
The October figure shows that the return to buying during September did not necessarily mark a sustained reversal.
Foreign investors remained net sellers in October, although they purchased more than ₹14,000 crore of shares during the final week of the month.
The broader picture is therefore more complicated than a simple foreign investor exit. Overseas funds are continuing to invest in India, but their overall ownership levels remain under pressure.
Domestic Investors Help Fill the Gap
Domestic institutional investors (DIIs), including mutual funds, insurance companies and other financial institutions, have played an important role in absorbing shares sold by foreign investors.
Indian mutual funds have increased their holdings in several large companies, helping support domestic equity ownership.
According to the Mint analysis of 100 large-cap companies, domestic mutual funds increased their stakes in 55% of the companies during the September quarter, while reducing holdings in 43%.
Foreign investors, meanwhile, reduced their stakes in 57% of the same group of companies.
This highlights the changing balance between domestic and overseas ownership in India’s stock market.
Regular investments through mutual fund systematic investment plans (SIPs), insurance premiums and other domestic investment channels have helped provide a source of capital for Indian equities.
The Bigger Picture
The decline in foreign ownership highlights a changing investment landscape for Indian equities. For years, international investors were attracted by India’s economic growth, expanding consumer market and improving corporate profitability. However, global investment priorities are shifting as AI-related opportunities in semiconductor and technology markets attract larger allocations.
India’s challenge is to remain competitive in attracting overseas capital while sustaining corporate earnings growth and improving market valuations. Domestic investors can provide stability, but foreign capital remains important for market liquidity, institutional participation and long-term investment.
The trend also demonstrates why foreign ownership data should be examined alongside earnings, valuations, investment flows and business performance rather than interpreted in isolation.
Looking Ahead
Foreign investor participation in Indian equities will depend on several factors, including corporate earnings growth, global interest rates, currency movements, geopolitical developments and the relative attractiveness of Indian stock valuations. A sustained improvement in earnings expectations could help make Indian companies more competitive against other emerging markets.
For now, the decline in foreign ownership across nearly 70 of India’s top 100 companies signals a period of portfolio repositioning. Domestic institutional investors continue to provide support, while overseas funds remain active in selected opportunities. The balance between these two investor groups will be an important feature of India’s equity market in the coming quarters.
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