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Large caps are taking the brunt of continuous FPI exodus

ICICIdirect Research 22 May 2026 DISCLAIMER

Elevated energy prices continued to trigger exodus of Foreign Portfolio Investors (FPIs) during the first fortnight of May as they sold another ~27k from Indian equities. The Financial Services sector bore the brunt of this exit, witnessing outflow of ~₹18k crore (~55% of total outflows).  Major liquidations also hammered the Oil & Gas block, which saw ~ ₹7k crore pulled out, alongside milder exits in Telecom (₹2.5k crore), Information Technology and FMCG (₹1.6k crores each). The continued retreat from index-heavyweight sectors (BFSI and IT) is triggering relative underperformance of the headline index (Nifty) vis-à-vis broader markets.
Conversely, FPIs diverted capital into segments to non-heavyweight sectors. The Services sector stood out as a primary beneficiary, attracting a substantial counter-trend inflow of ₹7k crore (Seems into Adani Group after settlement of US legal issues). Additionally, manufacturing and infrastructure plays showed resilience, with inflows of ~ ₹2,600 crore into Capital Goods and ₹1700 crore into Metals & Mining.
This sectoral activity indicates that while FPIs are aggressively de-risking from large-cap index drivers, they are looking at specific pockets of industrial segment.

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