FIIs Boost Stakes in Indian AI Stocks Amid Enterprise Demand Surge
Foreign institutional investors increased holdings in three Indian AI-focused companies during the March 2026 quarter, signaling renewed confidence in the sector's growth. These moves follow a dip in stakes earlier in the fiscal year and align with accelerating AI adoption across healthcare, finance, retail, manufacturing, cybersecurity, and automobiles. Investors eye these firms for their roles in AI software, cloud computing, semiconductors, automation, and data analytics, driven by India's digital initiatives and enterprise automation trends.
Tech Mahindra Sees FII Return After Sharp Pullback
Tech Mahindra, a Mahindra Group IT services firm operating in over 90 countries, serves banking, healthcare, manufacturing, and communications with AI, cloud, cybersecurity, and digital transformation offerings. FII holdings dropped from 20.60% in September 2025 to 17.94% in December 2025, then rose to 18.59% by March 2026. This rebound reflects selective re-entry as the company embeds AI across services, hires specialists, and scales engagements.
Management highlighted rising demand for data and AI initiatives with large clients, paving the way for enterprise transformations. FY26 added four US$50 million-plus clients to reach 29 and seven US$20 million-plus clients to hit 66, fueled by AI, data, and consulting expansions. Revenues reached US$6,385 million, up 1.9% year-on-year, while operating profit climbed 31.4% to US$797 million, lifting margins from 9.7% to 12.6%.
Tata Elxsi Rebounds on GenAI Investments
Tata Elxsi delivers design and technology services in automotive, broadcast, communications, healthcare, and transportation, leveraging IoT, cloud, mobility, VR, and AI. FII stakes fell from 12.53% in September 2025 to 8.57% in December, then recovered to 11.08% in March 2026, indicating restored faith amid valuation pressures.
In FY26, the company advanced GenAI adoption through partnerships, its DevStudio.ai automotive platform, tool stacks, infrastructure, and upskilling. These steps position Tata Elxsi as an AI-native engineering firm, emphasizing design-led AI offerings, operational leverage, and margin growth. Management prioritizes scaling these capabilities for sustainable expansion.
LTM Builds Steady FII Interest with AI Deals
LTM, rebranded from LTIMindtree in 2026 and backed by Larsen & Toubro, offers cloud, AI, cybersecurity, digital engineering, analytics, and enterprise applications. FII holdings edged up from 6.40% in September 2025 to 6.51% in December and 6.63% in March 2026, showing gradual confidence.
The launch of BlueVerse, an agentic AI ecosystem, speeds clients' AI implementations. Q4 FY26 order inflows hit US$1.7 billion, the sixth straight quarter above US$1.5 billion, including major AI wins like an enterprise-wide deal with a US financial firm and a partnership with a global software provider for AI transformations. LTM's approach rests on AI foundations, skilled talent, and enhanced productivity.
These FII increases underscore AI stocks' appeal in India, where government digital pushes and smart solution demand bolster long-term productivity gains. Investors value the firms' profitability improvements amid global industry shifts.
