Foreign institutional investors (FIIs) have remained net sellers in India’s equity markets throughout 2025, offloading over Rs 2 lakh crore so far, including Rs 33,000 crore in September alone. By September 26, FII sell-offs in the cash market had reached nearly Rs 2 lakh crore. Last week alone, they sold shares worth Rs 19,550 crore and continued as net sellers on Monday, offloading another Rs 2,805 crore.
Despite this, FII participation in primary markets remains robust, with around Rs 48,000 crore invested in initial public offerings (IPOs) in 2025. Experts cite high equity valuations, better opportunities abroad—particularly in China—sluggish earnings growth, and ongoing geopolitical risks as the primary drivers of FII exits.
FII activity has fluctuated throughout the year. While FPIs were net sellers in the first quarter of 2025, they turned buyers in the next three months. However, July through September saw renewed selling. Currency depreciation has also played a role, as other emerging market currencies strengthened against the dollar. FIIs are reallocating funds to markets such as Hong Kong, Taiwan, and South Korea, which have delivered solid returns this year.
Slower domestic earnings growth has further dampened FII confidence. Indian companies’ earnings have fallen short of expectations in recent quarters, prompting investors to seek stronger growth prospects elsewhere. Additional pressure stems from new US tariffs on Indian goods and higher H-1B visa fees, which have rattled market sentiment.
On Tuesday, benchmark indices opened marginally higher amid continued FII selling. The Nifty 50 started at 24,691.95, up 23.15 points (0.09 per cent) from its previous close of 24,634.90, while the Sensex opened at 80,541.77, higher by 58.07 points (0.07 per cent) from 80,364.94.
Domestic institutional investors (DIIs) provided a cushion, buying equities worth Rs 3,845 crore on Monday, even as FIIs offloaded Rs 2,830 crore for the sixth consecutive session.
Among Nifty 50 stocks, JSW Steel led the gainers at Rs 1,137, up 1.32 per cent, followed by Bharat Electronics (Rs 404.95, +1.25 per cent), Power Grid (Rs 283.90, +1.18 per cent), Hindalco (Rs 762, +1.09 per cent), and Adani Ports (Rs 1,396.10, +0.93 per cent).
On the downside, InterGlobe Aviation (IndiGo) fell 1.45 per cent to Rs 5,624, Larsen & Toubro declined 0.98 per cent to Rs 3,652.30, ITC slipped 0.79 per cent to Rs 404.05, Axis Bank dropped 0.43 per cent to Rs 1,127.30, and Tata Motors was down 0.36 per cent at Rs 670.10. |
