Foreign institutional investors (FIIs) have shown renewed confidence in India’s smallcap segment during the second quarter of FY26, significantly increasing their holdings in several emerging companies. Data from recent shareholding patterns reveal that FIIs have raised their stakes across a range of smallcap counters, with notable inflows into Authum Investment, Marathon Nextgen Realty, and Shyam Metalics.
Authum Investment topped the list, with FII holding surging from 7.94% in Q1FY26 to 14.11% in Q2FY26, marking a sharp increase of 6.17 percentage points (pp). This substantial rise indicates growing foreign investor conviction in the company’s long-term growth prospects and business fundamentals.
Marathon Nextgen Realty followed closely, witnessing its FII holding jump from 0.94% to 6.89%, an impressive 5.95 pp increase. The real estate developer’s strong performance and improving demand outlook in the Mumbai region may have driven this surge in foreign participation.
Shyam Metalics also attracted considerable interest, as FIIs raised their stake from 0.44% to 3.65%, reflecting a 3.21 pp increase. The company’s robust balance sheet and consistent operating performance in the metals sector could have played a key role in drawing global investors.
Other companies that witnessed a notable rise in FII ownership include Fiem Industries (up 2.51 pp to 7.19%), HBL Engineering (up 2.27 pp to 7.10%), and Amber Enterprises (up 2.02 pp to 30.61%), showing consistent foreign interest in the manufacturing and engineering sectors.
Among the other gainers were:
Power Mech Projects: FII stake increased from 5.07% to 7.01% (+1.94 pp)
Apollo Micro Systems: FII stake rose from 7.16% to 8.94% (+1.78 pp)
Kingfa Science: FII stake climbed from 6.34% to 7.78% (+1.44 pp)
Healthcare Global: FII stake improved from 2.16% to 3.59% (+1.43 pp)
The broader pattern suggests that FIIs are selectively positioning themselves in fundamentally strong smallcap names with visible earnings growth and favorable sector tailwinds. Analysts believe this renewed inflow into smallcaps highlights improving risk appetite among foreign investors, supported by India’s resilient macroeconomic outlook and stable corporate earnings trajectory.
Experts also note that sustained inflows into smallcaps could continue if earnings momentum and valuation comfort persist through the rest of FY26.
Disclaimer:
This article is for informational purposes only and is based on publicly available data on FII shareholding patterns for Q2FY26. It should not be considered as investment advice or a recommendation to buy, sell, or hold any securities. Investors are advised to conduct their own research or consult a qualified financial advisor before making any investment decisions. The author and the website are not responsible for any financial losses or decisions made based on the information provided in this article.
