Foreign ownership falls in private banks

The data also showed sharper declines in some smaller private-sector lenders

Foreign institutional investors (FIIs) reduced their holdings in several private sector banks in the June quarter, with their stakes in HDFC Bank, Kotak Mahindra Bank and Axis Bank declining sequentially, data for the quarter showed.FII holding in HDFC Bank fell to 36.26 per cent in June 2026 from 38.16 per cent in March, while the holding in Kotak Mahindra Bank declined to 25.21 per cent from 26.40 per cent. In Axis Bank, FII holding fell to 39.91 per cent from 40.71 per cent, while ICICI Bank saw a smaller decline to 33.79 per cent from 34.49 per cent.IndusInd Bank was among the private lenders that saw an increase in FII ownership, with the holding rising to 27.81 per cent in June from 27.25 per cent in March. Federal Bank’s FII holding increased to 27.43 per cent from 25.79 per cent, while Karnataka Bank saw an increase to 13.10 per cent from 11.79 per cent.Sharper declinesThe data also showed sharper declines in some smaller private-sector lenders. City Union Bank’s FII holding fell to 18.65 per cent from 23.37 per cent, while Bandhan Bank’s holding declined to 17.72 per cent from 19.82 per cent. AU Small Finance Bank saw FII holding fall to 35.98 per cent from 37.26 per cent.“Foreign portfolio investors have been continuously selling from India over the past four-five quarters as part of their broader strategy. Banking and financial services is one sector where FIIs have larger stakes, so that has resulted in their shareholding in private sector banks coming down,” said Kranthi Bathini, Director-Equity Strategy, WealthMills Securities.The decline has come amid sustained selling by foreign portfolio investors in Indian equities. Banking and financial services companies, which have traditionally had relatively high foreign institutional ownership, have consequently seen a larger impact from the reduction in overseas exposure.Published on September 7, 2026