Foreign institutional investors (FIIs) have never owned less of India's biggest companies in two decades and that under-ownership is now colliding with valuations that have fallen below long-term averages, setting up what some fund managers call a stock-picker's contrarian moment.Average FII ownership across India's top 10 listed companies has fallen to just about 34% of free-float market capitalization, the lowest level in two decades and even below the 37% trough hit during the Global Financial Crisis, according to data from DSP Mutual Fund.The steady reduction in FII holdings is one of the key drivers behind a broader trend that India's largest companies now account for their smallest share of the overall market capitalization on record, with the top 10 stocks' share of total India market cap down to 17% as of the latest data versus a peak of 39% in December 2019.The stock-level breakdown shows the extent of the pullback.
FII ownership in Axis Bank has fallen to 44% of free-float market cap in March 2026 from 68% in June 2014; Kotak Mahindra Bank to 36% from 59%; HDFC Bank to 38% from 44%; and TCS to 34% from 63% over the same stretch.
Infosys, ICICI Bank and Reliance Industries have also seen their FII ownership decline versus 2014 levels, though the drop has been more moderate for some names such as ICICI Bank and Reliance.
