FIIs Record Highest Inflow in 17 Months With $2.44 Billion Net Buying in February

Mumbai, February 26: Foreign institutional investors recorded their strongest monthly inflow in 17 months in February, pumping in nearly $2.44 billion into Indian equities, according to exchange data released on Thursday.

The latest inflow marks the highest monthly net purchase since September 2024 and signals renewed foreign participation in domestic markets after an extended phase of selling pressure.

Secondary and Primary Market Participation​

Out of the total inflows, FIIs invested approximately $2.14 billion in secondary markets and $299 million in primary markets during the month.

While buying activity in primary markets has remained steady since October 2023, secondary markets had witnessed sustained selling between January 2024 and December 2025. During that period, cumulative FII outflows from secondary markets exceeded $46 billion.

The February net buying came despite earlier sales of IT stocks worth $1.21 billion during the month, underscoring selective positioning by foreign investors.

Cautious Outlook Despite Turnaround​

Market observers noted that the scale of February’s inflows remains modest when compared to the magnitude of prior outflows. As a result, the latest buying could represent a temporary pause rather than a structural reversal in trend.

Some analysts indicated that continued selling in the IT sector could potentially trigger renewed outflows. However, they also stated that the case for aggressive fresh selling appears less compelling as valuations in Indian equities have moderated.

Market Performance and Growth Expectations​

Over the past month, the Sensex has gained 1.08 percent, while the Nifty has risen 2.05 percent. Broader markets have outperformed, with the Nifty Midcap 100 advancing about 4.72 percent and the Smallcap 250 Index climbing 5.10 percent.

Early signs of recovery are emerging in Indian equities. Under a base case scenario, the Nifty is projected to reach 27,958 over the next 12 months, according to a recent report.

The report stated that India’s growth trajectory is entering a decisive phase, supported by policy clarity, landmark trade agreements, and sustained infrastructure development.

India’s accelerated progress in trade diplomacy, particularly the India EU Free Trade Agreement, was highlighted as a key catalyst for the next growth cycle.

Sectorally, banks and diversified financials are seen benefiting from normalization in credit growth toward 13 to 14 percent and stable asset quality. Capital goods and engineering companies are also expected to gain from the ongoing infrastructure and defense push.