FPI Tracker: At ₹60,000 crore outflow, financials account for over 50% of March exodus

Foreign Portfolio Investors (FPIs) were aggressive sellers in Indian equities in March 2026, offloading stocks worth over ₹1 lakh crore, with financial services taking the worst hit. The FPI outflow was driven by escalating geopolitical tensions stemming from the US-Iran war and a weakening rupee amid rising crude oil prices.

According to NSDL data, FPIs sold Indian equities worth ₹1,17,775 crore during the month. Financial services bore the brunt of the outflows, with investors pulling out ₹60,655 crore from the sector, accounting for over 50% of the total outflows.

In the first half of March, FPI outflows from the financial services sector were recorded at ₹31,831 crore, followed by ₹28,824 crore worth of selling in the second half of the month. Consequently, FPIs’ assets under custody (AUC) in the sector declined sharply to ₹19.04 lakh crore from ₹23.26 lakh crore on a month-on-month basis.

The sustained selling pressure weighed heavily on banking stocks, with the Nifty Bank index plunging more than 17% during the month. HDFC Bank share price fell 17.6% in March, also impacted by the unexpected exit of its part-time Chairman, Atanu Chakraborty.

Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments, noted that the sharp FPI outflows have created a paradox, with investors exiting fundamentally strong and attractively-valued banking stocks that offer robust long-term growth prospects.

“The banking sector continues to witness healthy credit growth and strong asset quality. The current FPI selling appears to be driven by short-term factors such as rupee weakness and elevated US bond yields. Long-term investors with the ability to withstand near-term volatility may find attractive, low-risk opportunities in high-quality financial stocks, particularly leading banks,” he said.

FPI Selling Across Other Sectors

Except for capital goods, all major sectors witnessed significant FPI outflows in March.

The automobile and auto components sector recorded the second-highest outflows at ₹12,498 crore. This was followed by construction ( ₹9,154 crore), telecommunications ( ₹5,603 crore), and FMCG ( ₹5,419 crore).

Real estate and healthcare sectors each saw outflows exceeding ₹4,600 crore, while the oil, gas and consumable fuels segment recorded FPI selling of ₹4,129 crore.

Metals & mining and construction materials sectors witnessed outflows of more than ₹3,000 crore each. Meanwhile, consumer durables, services, and consumer services sectors saw FPI selling of over ₹2,000 crore each.

Information technology stocks experienced relatively lower outflows, amounting to ₹1,874 crore.

In contrast, the capital goods sector emerged as the sole beneficiary, attracting FPI inflows of ₹3,148 crore during the month.

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