India's stock market has experienced a dramatic reversal from its position as the world's best-performing market two years ago. According to reports from Mint, India is now among the worst-performing stock markets globally despite being the fastest-growing large economy over the last five years. The Nifty index appreciated 86.4% from 14,018 on January 1, 2021, to 26,129 on December 31, 2025, despite total FII flows of negative ₹90,439 crore during this five-year period. As reported by Mint, sustained FII selling has contributed to market weakness, but there is no correlation between FII activity and long-term market trends.
Despite continued net selling, foreign institutional investors have raised their stakes in 20 stocks for four successive quarters in the March 2026 quarter. According to 5paisa data, BlackBuck saw the maximum increase, rising by almost 21 percentage points to reach 32.5% from 11.6% a year ago. Vishal Mega Mart and South Indian Bank experienced increases of almost 15 percentage points each, reaching 22% and 24.2% respectively. Other companies witnessing FII accumulation include MTAR Technologies, Home First Finance Company, Virtuoso Optoelectronics, Shaily Engineering Plastics, and Abans Enterprises with increases ranging between 8-10%. Companies like GRM Overseas, Kalpataru, UPL, GE Vernova T&D India, Polycab India, Hitachi Energy India, and Waaree Energies experienced increases of 6-8%. The latest shareholding data for the March quarter shows FIIs have been selectively increasing stakes in additional companies including Midwest Gold, Tamilnadu Petroproducts, GMR Airports, Bharat Petroleum Corporation and Hindustan Petroleum Corporation.
Foreign institutional investors sold approximately ₹1.17 lakh crore in Indian stocks during the fourth quarter of FY26, according to latest reports. However, their buying activity in certain stocks tells a different story. FIIs actively bought shares in five specific companies: PC Jeweller, Bajaj Consumer Care, Vishal Mega Mart, MCX, and MTAR Technologies. This selective buying indicates FIIs are focusing on companies with strong growth prospects and solid fundamentals, rather than leaving the Indian market entirely, even as overall market indexes struggled. The concentrated interest in these companies suggests they are seen as resilient or set to benefit from industry trends, outweighing broader economic worries.
PC Jeweller's efforts to cut debt and return to profit in Q4 FY25 likely boosted FII confidence, despite auditor concerns about export receivables. Vishal Mega Mart's steady revenue and profit growth, plus aggressive store expansion, make it attractive for those wanting exposure to India's expanding value retail sector. MCX, as the leading commodity exchange, benefits from higher market activity and new offerings. MTAR Technologies is well-positioned in the growing defence and clean energy sectors, backed by a strong order book. Bajaj Consumer Care's established brands and growth plans also draw investor capital. While directly linking FII purchases to immediate stock price movements is difficult due to market swings, their continued interest signals belief in these companies' individual futures.
Despite positive outlook, these stocks face significant risks. PC Jeweller's auditor flagged ₹1,512.03 crore in export receivables, raising concerns about asset valuation and potential write-offs. Bajaj Consumer Care's higher PEG ratio suggests its valuation could be pressured if growth slows, and reliance on a few key products creates concentration risk. Vishal Mega Mart's high P/E ratio makes it vulnerable to market shifts or slower expansion, while competition from larger retailers and online platforms remains a threat. MCX operates in a regulated sector, exposing it to policy changes. MTAR Technologies' very high valuation (over 160x P/E) makes it sensitive to any miss in growth targets. Analysts remain largely positive on these stocks: Vishal Mega Mart holds a 'Strong Buy' consensus with an average target price near ₹146.59. MTAR Technologies also has a 'Strong Buy' rating, with targets around ₹4,629. MCX has a 'Buy' consensus and an average target of ₹2,980.
