Foreign institutional investors have shown rising confidence in Indian equities, increasing their shareholding over the past year in companies across FMCG, retail, banking, financial services, energy, renewable power, chemicals, and industrial manufacturing. This trend signals optimism about long-term growth prospects in the Indian market, with 10 companies experiencing significant increases in FII participation.

Top Performers in FII Stake Increases

AWL Agri Business emerged as the standout performer with the most dramatic increase in foreign institutional investment. The major FMCG and agribusiness company, known for edible oils under brands like Fortune, operates across edible oils, food staples, and value-added food products with strong distribution networks and backward integration.

Vishal Mega Mart, the value retail chain catering to mass and middle-income consumers, also attracted substantial foreign investor interest. The company focuses on affordable pricing through high footfall stores across tier-2 and tier-3 cities, offering apparel, household goods, groceries, and general merchandise.

Industrial and Energy Sector Participation

UPL, the global agrochemicals company providing crop protection products and sustainable agricultural solutions, maintained its position as a favorite among foreign investors. With strong international presence serving farmers across continents, the company continues to play a key role in improving crop productivity and food security.

Hitachi Energy India operates in power transmission, grid automation, and energy infrastructure solutions. The company plays a critical role in India's renewable energy integration, smart grids, and electrification, benefiting from long-term investments in power and clean energy sectors.

Banking and Financial Services Attraction

Bank of Maharashtra, a public sector bank with growing focus on retail lending, MSMEs, and digital banking, witnessed improved foreign interest. The bank has strengthened its balance sheet and expanded presence beyond its traditional regional base while improving asset quality and profitability.

L&T Finance, the non-banking financial company under the Larsen & Toubro group, offers retail loans, farm equipment finance, housing finance, and infrastructure lending. The company leverages the L&T brand while focusing on retail-led growth and digital transformation.

Specialized Sector Investments

Other companies attracting foreign institutional interest include Force Motors, specializing in utility vehicles, vans, and engines while supplying to global OEMs like Mercedes-Benz and BMW in India. Aadhar Housing Finance focuses on affordable housing finance for low- and middle-income borrowers in semi-urban and rural areas, benefiting from government housing schemes.

NHPC, India's largest hydropower development company, plays a strategic role in the country's clean energy transition with exposure to solar and wind projects. HEG, a leading manufacturer of graphite electrodes for steel production, represents the industrial manufacturing sector with performance linked to global steel demand and export markets.

This broad-based increase in FII participation across diverse sectors reflects growing foreign confidence in India's economic fundamentals and long-term growth trajectory across multiple industries.

Foreign institutional investors extended their selling momentum into 2026, pulling out ₹22,420 crore from Indian equity markets across 19 sectors in the first half of January. The sustained outflows reflect continued caution among overseas investors amid valuation concerns and global uncertainties.

FMCG Sector Bears Maximum Selling Pressure

The Fast Moving Consumer Goods sector emerged as the worst affected, witnessing foreign outflows worth ₹6,128 crore during the period. This selling pressure comes after the sector already faced significant withdrawals of ₹35,000 crore in 2025, marking it as the second-highest sectoral outflow last year.

According to Pranay Aggarwal, director and CEO of Stoxkart, the FMCG sector has witnessed mostly value-driven foreign outflows as these stocks typically command high Price to Earnings ratios of over 50 times. "Since foreign investors are valuation sensitive, they seem to have withdrawn funds," Aggarwal explained.

Financial Services and IT Face Continued Outflows

Financial services and information technology sectors also experienced notable selling pressure, with foreign investors withdrawing ₹3,190 crore and ₹2,075 crore respectively in the first half of January. These outflows follow substantial annual withdrawals in 2025, where IT sector faced the highest outflows of ₹74,698 crore.

Bhavik Joshi, business head at INVasset PMS, noted that banking and financial services stocks had shown resilience even as mid- and small-cap segments weakened through much of 2025. "There may be some profit-taking by global investors in BFSI after last year's strong run, but the fundamental outlook for the sector remains constructive," he said.

For the IT sector, Aggarwal indicated that higher tariff threats are outweighing the tailwinds from rupee depreciation, prompting foreign investors to take a backseat in IT stocks.

Metals and Mining Attract Foreign Investment

Contrary to the broad selling trend, foreign investors demonstrated buying interest in select sectors, purchasing shares worth ₹3,406 crore across three sectors. The metals and mining sector attracted the highest inflows of ₹2,689 crore, building on the ₹2,984 crore inflows received in December.

The renewed interest in metals coincides with strong precious metal performance, with gold prices jumping 5.10% and silver gaining 3.10% in India. When dollar-denominated metal prices strengthen, mining and metal stocks typically respond positively, analysts noted.

Joshi explained that foreign investors appear to be rotating allocations toward metal-linked equities, driven by the recent outperformance of gold and silver. "With the current rally being further supported by geopolitical tensions, this uptrend could extend over the next six to twelve months," he added.

Industrial Metals Gain Investor Attention

Industrial metals such as copper and aluminium are seeing renewed investor interest, partly because there are no direct ETF avenues for these metals, making equities the primary route for exposure. This structural factor continues to support foreign investment flows into the metals and mining sector despite broader market selling pressure.