Neutral impactEconomy
Why FIIs could continue moving out of largecaps and into mid and smallcaps: Motilal's Rajat Rajgarhia
Economic Times 3 hrs ago·31 Aug 2026, 3:31 am
Foreign institutional investors (FIIs) have been net sellers in India recently, but a top analyst suggests this trend may shift toward smaller companies. Rajat Rajgarhia of Motilal Oswal notes that while large-cap stocks have already priced in many global risks, mid and small-cap stocks remain relatively cheaper. This price difference makes smaller companies a more attractive option for foreign funds looking for better value.
For investors, this shift could mean renewed volatility in the broader market. As money flows out of the biggest companies and into smaller ones, large-cap indices might see pressure, while mid and small-cap segments could gain momentum. This move is driven by the belief that smaller companies have more room to grow despite global uncertainties.
Investors should keep an eye on the pace of these flows and how domestic investors react. A sustained move by FIIs could signal a broader rotation in the market, favoring smaller companies over the giants. Monitoring these trends will help in understanding where the market might head next.
Key takeaways
- Category: Economy.
- Assessed as a significant, market-relevant update.
Why it matters
A meaningful update worth tracking. Use the price and stock snapshot to gauge how the market is responding.
