Foreign investors pull out Rs 27,048 crore in May from Indian equity market

With outflows of Rs 27,048 crore so far in May, foreign investors have continued to reduce their exposure to Indian stocks, reflecting global investors' caution amid a changing macroeconomic and geopolitical landscape.

As a result, according to data from the NSDL, the total amount of funds that foreign portfolio investors (FPIs) withdrew from the equity market in 2026 was Rs 2.2 trillion, which is more than the Rs 1.66 trillion that they pulled out in 2025.

With the exception of February, FPIs were net sellers in each month of 2026. Before turning net buyers in February, when they invested Rs 22,615 crore—the largest monthly inflow in 17 months—they had withdrawn Rs 35,962 crore in January.

But in March, foreign investors withdrew a record Rs 1.17 trillion, reversing the trend. With net outflows of Rs 60,847 crore in April and over Rs 27,000 crore in withdrawals so far in May, the selling continued.

Pabitro Mukherjee, Associate Vice President- Research, Bajaj Broking, said the markets recorded elevated volatility during last week as rising crude oil prices, depreciating rupee, ongoing geopolitical tensions, continued FII outflows and high–stakes US–China diplomatic talks in Beijing kept investors cautious.

“Nifty started the week on a negative note and formed an intra-week low of 23,263 on the Wednesday session. Index witnessed a strong rebound on the Thursday session but failed to generate follow-up buying on Friday to close the week down by 2.2 percent,” he said.

Looking ahead, institutional flows are likely to remain sensitive to developments around US–Iran tensions, oil-price trajectories, and quarterly corporate earnings, added Mukherjee.

Meanwhile, on Friday (15 May), market regulator Securities and Exchange Board of India (SEBI) has eased PAN-related compliance requirements for Foreign Portfolio Investors (FPIs) using the Common Application Form (CAF), a single form used by overseas investors for registration, opening bank and demat accounts, and obtaining PAN in India.