The heaviest FII sell-offs were recorded in October (Rs 94,017 crore) and January (Rs 78,027 crore). FIIs were net buyers in June, July, August, September, and December, with the peak buying in September (Rs 57,724 crore).
Foreign Institutional Investors (FIIs) were net sellers in the Indian equity market during FY2025, divesting stocks worth Rs 1,27,401 crore, according to data cited in an Economic Times report. However, the selling pressure significantly eased in March, with FIIs offloading Rs 3,972.61 crore in domestic equities. In contrast, Domestic Institutional Investors (DIIs) maintained a bullish stance throughout the year, accumulating Rs 6,06,368 crore in stocks, with March alone witnessing net purchases worth Rs 37,079.08 crore.
On Friday, FIIs sold shares worth Rs 4,352.82 crore, while DIIs counterbalanced the selling pressure with Rs 7,646.49 crore in net purchases.
Market Rebound and Changing FII Trends
According to VK Vijayakumar, Chief Investment Strategist at Geojit Investments, the reversal in FII strategy was noticeable in the week ending March 21 and gained traction in the following days. This shift helped the Nifty index rise nearly 6 per cent in March, marking a recovery after a five-month losing streak, the longest since Nifty’s inception in 1996.Vijayakumar attributes the turnaround to three key factors:
- Attractive valuations – Nifty fell 16 per cent from its September peak to February, making Indian equities more appealing.
Regulatory Developments and Future Outlook
Looking ahead, FII flows will likely be influenced by the US reciprocal tariffs set for April 2. If the tariffs are moderate, analysts expect the Indian stock market rally to sustain.Additionally, the Reserve Bank of India (RBI) is set to double the foreign investment cap in listed companies to 10 per cent, according to reports reviewed by Reuters. This move is expected to attract fresh foreign capital inflows.
With regulatory changes, macro stability, and global trade developments shaping investor sentiment, the coming months will be crucial in determining whether FIIs return as sustained buyers or continue a cautious stance.