Global risk sparks $497 million flight to India power stocks by FIIs in February

Foreign investors appear to be finding comfort in India’s power sector amid heightened geopolitical tensions and energy market disruptions, drawn by rising demand for electricity and growing data centre capacity.They bought power stocks worth $497 million in February, according to data from the National Securities Depository Ltd. That marked the strongest inflow by foreign investors since they pumped in $517 million in April 2024.Several power stocks delivered solid gains in February, when the benchmark Nifty 50 index slipped 0.6%.

GMR Power and Urban Infra led the pack with a 19.5% jump, followed by Torrent Power, which rallied 14%, and Adani Green Energy, up 11%. NTPC climbed 8%, JSW Energy gained 6.1%, while Tata Power edged up 3%, underscoring the sector’s relative resilience in an otherwise weak market.February inflows aren’t happening in a vacuum, said Divam Sharma, co-founder and fund manager at Green Portfolio PMS.According to him, investors are looking at a “rare mix” of structural demand driven by AI and digital infrastructure, 100% foreign direct investment allowance, and an increasingly investor-friendly regulatory environment.

With many countries facing energy security concerns, India’s power sector offers a growth story with defensive characteristics, he said.“That’s a compelling proposition for any allocator,” Sharma said.The ongoing Russia-Ukraine war and the US-Israel attacks on Iran have forced global capital to seriously reassess where critical energy infrastructure sits on the risk spectrum, he said.“What investors have realized is that energy is no longer just a commodity play. In an AI-driven world, it’s becoming the foundational infrastructure layer.