Summary of this article
FPIs sold Rs 20,974 crore in Indian equities through September 18
Healthcare attracted Rs 2,114 crore from FPIs during September 1-15
Nifty Healthcare Index gained 17.69 per cent over six months
Foreign portfolio investors (FPIs) have sold Rs 20,974 crore worth of Indian equities through September 18, reversing the buying trend seen in the previous two months.
Financial services bore the brunt of the selling, with FPIs withdrawing Rs 6,204 crore during the September 1-15 fortnight, the highest outflow among sectors. Automobiles followed with outflows of Rs 2,670 crore, while oil and gas, fast-moving consumer goods (FMCG) and power saw selling worth Rs 2,385 crore, Rs 2,029 crore and Rs 1,653 crore, respectively.
Telecom and information technology stocks also witnessed outflows of Rs 991 crore and Rs 960 crore, respectively.
Healthcare, however, continued to attract foreign money. FPIs invested Rs 2,114 crore in the sector during the fortnight, extending their buying streak to six consecutive fortnights.
The last time FPIs were net sellers in healthcare was during the June 1 to 15 fortnight, when they pulled out Rs 4,501 crore. Since then, they have invested a cumulative Rs 17,235 crore in the sector. Assets under custody (AUC) in healthcare stood at Rs 5,35,596 crore as of September 15, an increase of around Rs 53,000 crore over the six fortnights.
The buying has coincided with a strong showing by healthcare stocks. The Nifty Healthcare Index has risen around 17.69 per cent over six months, significantly outperforming the Nifty 50, which has gained only one per cent during the same time period. The index includes pharmaceutical companies, hospitals, diagnostics and other healthcare businesses.
Why Healthcare Stocks Are Rising
Investors appear to be favouring healthcare businesses with relatively visible earnings prospects amid heightened geopolitical uncertainty. The sector's growth, however, is being supported by company-specific and structural factors rather than a single common trigger.
Hospital operators are benefiting from healthy patient demand, occupancy levels and higher revenue per occupied bed. In its July 2026 report, rating agency ICRA said hospital companies in its sample were expected to record revenue growth of 13-15 per cent in FY27 and 15-17 per cent in FY28. It attributed the outlook to sustained demand, continued bed additions, and the gradual ramp-up of new facilities. The companies had recorded 18 per cent revenue growth in FY26, with occupancy at 63.5 per cent and average revenue per occupied bed rising 9.2 per cent.
Diagnostics is another area seeing structural demand. In another July report, ICRA said rising lifestyle diseases, greater health awareness, improving insurance penetration and expansion into smaller cities were supporting organised diagnostic players. It expects the sector to grow 12-14 per cent in FY27.
Domestic institutional investors are also increasing their exposure. According to Motilal Oswal Financial Services' September 2026 Fund Folio report, mutual funds raised their healthcare allocation for the fourth consecutive month in August to 8.4 per cent, the highest in 71 months. The allocation was up from 8.1 per cent in July.
The continued FPI and mutual fund interest suggests healthcare has been attracting institutional attention even as foreign investors reduce exposure to several other sectors.
Why Are FPIs Selling
The selling pressure across Indian equities has been driven by a combination of global monetary policy concerns, elevated crude oil prices, and rupee weakness.
Dheeraj Gaur, chief investment strategy officer at Choice Wealth, said FPIs are selling due to higher US rates and yields, elevated oil prices, geopolitical tensions, and rupee depreciation.
On the US rate outlook, Gaur said, "The spread between Indian and US yields keeps getting tighter." A narrowing yield differential can make Indian assets relatively less attractive to foreign investors, particularly when US interest rates and bond yields are rising.
Oil prices are another concern. "Brent crude’s stuck above $100/barrel. Add in tensions in the West Asia, and you get fresh worries," Gaur said. Brent crude futures last traded at $103.90 a barrel. Higher crude prices can add to India's import bill and inflationary pressures, weighing on the broader economic and market outlook.
The rupee fell 1.1 per cent in the preceding week to a record low of 95.92-95.96, breaching 96 intraday, Gaur said. The depreciation also eroded dollar returns for foreign investors.
"Currency losses erode dollar-denominated returns and mechanically encourage hedging and redemption," he said.
The combination of these pressures has coincided with foreign investors pulling money out of several sectors, particularly financial services. Healthcare, meanwhile, has continued to attract both foreign and domestic institutional investment, supported by its earnings outlook and structural demand drivers.
