February Sees Record Inflows from FIIs into Indian Markets
Synopsis
In an impressive turn of events, February 2024 witnessed the highest inflow of Foreign Institutional Investors (FIIs) in 17 months, totaling $2.44 billion. This surge indicates potential recovery in the Indian markets, despite previous challenges in the IT sector.
Key Takeaways
FIIs inflow: $2.44 billion in February 2024.
Secondary market investment: $2.14 billion.
Primary market investment: $299 million.
IT sector: Significant selling of $1.21 billion.
Market growth potential: Nifty projected to reach 27,958.
Mumbai, February 26 (NationPress) Foreign Institutional Investors (FIIs) experienced their most substantial inflow in 17 months during February, achieving net inflows of approximately $2.44 billion, according to exchange data released on Thursday.
In February, FIIs invested nearly $2.14 billion in secondary markets and $299 million in primary markets, marking the largest monthly net purchase since September 2024.
Since October 2023, FIIs have maintained steady primary market purchases; however, between January 2024 and December 2025, cumulative secondary market outflows by FIIs exceeded $46 billion. The net buying in February occurred despite significant selling of $1.21 billion in IT stocks earlier in the month.
Analysts have warned that the inflows in February, while notable, are relatively modest compared to the scale of previous sell-offs and may only signify a temporary halt rather than a fundamental trend reversal. There are concerns that ongoing selling in IT could lead to renewed outflows, although the rationale for aggressive selling has diminished as valuations in Indian equities have become more attractive.
Over the past month, the Sensex has appreciated by 1.08 percent, while Nifty has risen by 2.05 percent. Additionally, the Nifty Midcap 100 and SmallCap 250 indices have gained approximately 4.72 percent and 5.10 percent, respectively.
Early indications of recovery in Indian markets are emerging, with projections suggesting that Nifty could reach 27,958 over the next 12 months under a baseline scenario, according to a recent report.
"India’s growth narrative is moving into a crucial phase as policy clarity, landmark trade agreements, and a sustained push for infrastructure converge to create a robust foundation for the next expansion phase," the report stated.
A key catalyst for the upcoming growth cycle has been India’s accelerated advances in trade diplomacy, particularly highlighting the India–EU Free Trade Agreement.
Sector-wise, banks and diversified financial institutions are positioned to gain from a normalization in credit growth towards 13–14 percent alongside stable asset quality. Capital goods and engineering firms are expected to benefit from the ongoing infrastructure and defense initiatives, the report noted.
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Point of View
I see the recent inflow of FIIs as a cautiously optimistic sign for the Indian market. While the figures are encouraging, the context of previous outflows and ongoing challenges, particularly in the IT sector, necessitates a measured approach to these developments.
NationPress
6 May 2026
Frequently Asked Questions
What are the recent trends in FII investments in India?
In February 2024, FIIs recorded their largest inflow in 17 months, amounting to $2.44 billion, with significant investments in both secondary and primary markets.
How does the current FII inflow compare to previous periods?
The February inflow is the highest since September 2024 but occurs against a backdrop of substantial outflows exceeding $46 billion over the previous year and a half.
What sectors are expected to benefit from the current market trends?
Banks, diversified financials, capital goods, and engineering sectors are poised to benefit from credit growth normalization and ongoing infrastructure initiatives.
What impact does the IT sector have on FII investment?
Recent heavy selling in the IT sector, amounting to $1.21 billion, raises concerns about future FII outflows, although the overall case for aggressive selling appears less compelling.
What is the outlook for the Indian market moving forward?
The outlook remains cautiously optimistic, with projections suggesting that Nifty could reach 27,958 over the next year, bolstered by policy clarity and trade agreements.
