Foreign investors lower holdings in public banks

How They Stack Up

- MAHESH NAYAK

FOREIGN INSTITUTIONAL INVESTORS (FIIs) have pared their holdings in public sector banks (PSBs) during the first quarter this fiscal, signalling near-term caution after a robust FY25 rally.

Data show that the average foreign portfolio investment (FPI) in PSBs eased from 4.60% in Q4FY25 to 4.44% in Q1FY26, as investors selectively rebalanced portfolios.

Notable reductions were observed in Bank of Baroda (-0.90%), State Bank of India (-0.61%), and Punjab & Sind Bank (-0.48%), suggesting selective repositioning rather than a wholesale exit.

Sunny Agrawal, head of fundamental research at SBI Securities, said: "Valuation concerns and the global risk-off sentiment have seen FIIs reduce their stakes in PSU banks. This appears to be profit-booking after a strong FY25 rally that delivered outsized returns."