The decision has been taken amid an increase in the market size. Cash equity markets' trading volumes have more than doubled between FY 2022-23 and FY 2024-25.
While flows continued to be negative, the analysts noted that they paint a skewed picture with strong preferences for few themes and fading confidence in others.
In a letter to the market regulator, leading funds have said that they fear the planned move may create fragmentation of market volumes and distort prices due to two settlement cycles.
According to the data with the depositories, FPIs sold shares to the tune of Rs 3,412 crore during November 1-3. FPIs have been on a selling spree since the start of September.
According to the data with the depositories, Foreign Portfolio Investors (FPIs) sold shares to the tune of Rs 20,356 crore this month.
The requirement will come into force from October 1, the Securities and Exchange Board of India (Sebi) said in a circular.
If this trend continues, investment by FPIs in July will exceed the figures recorded in May and June, which were Rs 43,838 crore and Rs 47,148 crore, respectively, V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.