According to Sebi's annual report, options contract volumes on Indian bourses plunged 51.5% during fiscal 2026, while futures contract volumes fell nearly 18%. The report said the decline in F&O volumes during FY26:
was possibly driven by a series of regulatory interventions – including increased contract sizes, the rationalisation of weekly expiries, mandatory upfront premium collection etc, alongside an increase in the securities transaction tax.
According to the report, the interventions were aimed mainly at "reining in excessive speculative activities by retail investors." Despite the sharp reduction in the number of contracts traded, the report noted that in both premium and notional terms, the options segment witnessed growth during the year, whereas the futures segment showed a decline.
Regulatory interventions reshape the F&O market
The report's explanation for the volume decline points to a combination of policy changes that raised the cost and reduced the frequency of derivatives trading: increased contract sizes, rationalised weekly expiries, mandatory upfront premium collection, and a higher securities transaction tax.
| Segment | Change in contract volumes (FY26) | Premium/notional trend |
|---|---|---|
| Options | -51.5% | Growth |
| Futures | ~ -18% | Decline |
Even as the number of options contracts fell by more than half, options premium and notional values grew, according to the report, implying a shift toward larger average trade sizes in the options segment.
Record FPI outflows in FY26
The annual report also disclosed detailed figures on foreign portfolio investor (FPI) flows. According to the report, FPIs recorded a net outflow of a little over Rs 1.5 lakh crore during FY26 – an all-time record. The breakdown shows:
- FPIs were net sellers of equities worth Rs 1.8 lakh crore.
- They were net buyers of debt at Rs 25,807 crore.
- In the primary market, FPIs net bought stocks worth Rs 70,822 crore.
- In the secondary market, they were net sellers worth a little over Rs 2.5 lakh crore.
| FPI flow category | FY26 value |
|---|---|
| Total net outflow | > Rs 1.5 lakh crore (record) |
| Equities, net | - Rs 1.8 lakh crore |
| Debt, net | + Rs 25,807 crore |
| Primary market equities, net | + Rs 70,822 crore |
| Secondary market equities, net | ~ - Rs 2.5 lakh crore |
The report also detailed sectoral flows. FPIs were net buyers in capital goods, telecom, and metals & mining, and sellers in IT, financial services, FMCG and healthcare.
India's IPO market leadership
In terms of the number of initial public offerings during FY26, India led the world, according to the report. In terms of money raised via IPOs, India ranked third globally.
Implications for finance executives
For CFOs, treasury directors and investors tracking emerging-market capital flows, the FY26 figures in Sebi's annual report offer a detailed factual picture of India's capital markets. The record FPI equity outflow of over Rs 1.5 lakh crore was concentrated in secondary-market selling of more than Rs 2.5 lakh crore, partially offset by primary-market purchases of Rs 70,822 crore and debt purchases of Rs 25,807 crore. This mix of flows – secondary selling alongside primary buying and debt accumulation – provides a basis for understanding how foreign investors repositioned across Indian asset classes during the year, as documented by the report.
For treasuries that use exchange-traded derivatives for hedging, the report's contract volume data is directly relevant. Options volumes fell by 51.5% and futures volumes by nearly 18%, while options premium and notional values grew. The report attributed the decline to increased contract sizes, rationalised weekly expiries, mandatory upfront premium collection and a higher securities transaction tax – all structural factors that affect the cost and availability of derivatives instruments in the Indian market.
The sectoral FPI breakdown – net buying in capital goods, telecom and metals & mining, with net selling in IT, financial services, FMCG and healthcare – gives corporates a factual snapshot of where foreign investors were adding or reducing exposure during a year of record outflows. Together with India's global leadership in IPO count, the report provides documented evidence of the channels through which foreign capital accessed Indian markets in FY26.
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