FPIs sell Rs 3 lakh crore in secondary market, but invest Rs 55,000 crore in primary market

Fresh updates from the financial markets indicate that Foreign portfolio market participants (FPIs) have remained relentless sellers in secondary markets, offloading a record Rs 3 lakh crore in 2026 so far. That stated, during the same period, they bought into India's growing IPO story, pouring in over Rs 55,000 crore during the same time period.

This trend has remained unchanged for the third consecutive year, as foreign market participants buy into India's primary markets, while selling in secondary.

In 2024, the net FPI flows into the primary markets was Rs 1.2 lakh crore, while the selling in secondary markets was additionally Rs 1.2 lakh core. For 2025, the pace of buying into the primary segment reduced to Rs 73,910 crore, but selling in the secondary markets accelerated to Rs 2.4 lakh crore.

Further, FPIs additionally bought into India's debt markets, both primary and secondary. The only sale was noted in 2025, where foreign market participants sold almost Rs 24,000 crore in secondary markets. That stated, they bought Rs 32,000 crore in the primary debt markets, ensuring that net flows into debt for the year remained positive.

Equity IPOs stay a favoured bet for foreign market participants. "IPOs give FPIs access to sizeable allocations, better price discovery and, often, a valuation cushion," stated Pranav Haldea, managing director of Prime Database Group.

He further noted that this preference has persisted because "India’s primary market has consistently offered a pipeline of quality firms even when secondary-market valuations have appeared demanding."

Tarun Singh, MD & Founder, Highbrow Securities stated that the IPO shelf offers FPIs access to sectors like electronics manufacturing, consumer technology, or renewables, which the benchmark barely holds.

That stated, SEBI's data on IPOs over the last three years or so reveals foreign market participants sold around 3 percent of their anchor stock at the first unlock and around 60 percent within a year, as compared to mutual funds that sold 38 percent. "For foreign money, the primary market is an entry mechanism, not a home," explained Singh.

"Foreign money is buying a price. It comes in when the price is negotiated and not stretched. It leaves when the stock lists at a premium it never agreed to. In smaller issues the bar is elevated. With weak governance, cash stuck in working capital, or raw material prices that swing a lot, a foreign fund can't defend its holding after stock-exchange debut," noted Singh.

On the debt market front, Haldea explained that debt offers FPIs a more predictable risk-return profile. "With currency and equity-market volatility adding uncertainty, the combination of yield visibility and improving market access has made Indian debt relatively more attractive," he stated.