₹1.6 Lakh Cr Outflow: IT, FMCG and other sectors that attracted and lost FII money in 2025

Synopsis: In 2025, Foreign Institutional Investors (FIIs) divested over Rs 1.6 lakh crore from their holdings of stocks in India, exiting certain key sectors completely and accumulating additional positions in several other sectors. 

In 2025, the foreign institutional investors (FIIs) sold off a significant amount of stocks in India, as they sold over Rs 1.66 Lakh Crores, primarily due to concerns over increasing Stock Prices, Low Earnings Growth, uncertainty in the Global Markets, and Trade Tariff Issues.

Despite being net sellers in some sectors, FIIs did and continue to increase their investment in a select few sectors in India, investing over Rs 95,000 crore. As such, it appears that the FIIs are rotating out of some sectors while continuing to invest in others and have not fully exited India.

Sectors that saw the maximum selling

The information technology (IT) sector experienced the largest outflow of funds from Foreign Institutional Investors, with an outflow of approximately Rs 74,700 crore (over 45 percent of total selling). An increasing adoption of artificial intelligence and a subsequent decline in expected technology growth in developed regions led investors to become more cautious.

The fast-moving consumer goods (FMCG) sector experienced the second-highest outflow from FIIs with an outflow of approximately Rs 36,800 crore, largely due to high inflation, low demand from rural areas, and increased levels of competition from local brands and online commerce.

Foreign Institutional Investors also sold large amounts of investment in the Power Sector, with an approximate value of Rs 26,500 crore, primarily as a result of high levels of regulatory risk, high levels of debt, and geopolitical risk. 

In addition, FIIs divested their investment in healthcare (nearly Rs 25,000 crore), consumer durables (Rs 21,370 crore) and consumer services (Rs 16,500 crore), while also selling off their holdings in financials (Rs 14,900 crore), real estate (Rs 12,635 crore) and automobiles (Rs 11,900 crore), indicating a general risk-off attitude from foreign investors this year. 

Also, FIIs sold positions in construction materials (Rs 9,311 crore), construction (Rs 6,480 crore), and capital goods (Rs 2,581 crore), indicating caution around infrastructure-linked sectors. Smaller sell-offs were also seen in diversified stocks (Rs 1,422 crore) and textiles (Rs 1,224 crore), rounding off widespread sector-wise profit booking by foreign investors in 2025.

Sectors that saw the maximum buying

While there was selling pressure in the overall market, Foreign Institutional Investors (FIIs) invested in the telecom industry at a high level, having invested approximately Rs. 48,222 crores since the start of 2025. The potential for increasing cash flow, improved profitability, and total earnings recovery has created strong demand for investment from foreigners within this sector.

In addition to their investments in telecom, FIIs have also taken advantage of oil and gas (Rs 8,431 crores), service (Rs 7,071 crores), chemical (Rs 6,017 crores), metal and mineral (Rs 4,661 crores) and others (Rs 20,629 crores) opportunities by opening up positions within those industries. Such selective purchases imply that FIIs are targeting industries that exhibit strong balance sheets, pricing power and long-term visibility while still being careful about the overall market.

In simple, FIIs did not leave India but changed the sectors where they had invested. They sold heavily out of IT, FMCG, and the power sectors because of concerns regarding growth and risks, while continuing to support telecoms and some of the other sectors with greater visibility of earnings. Thus indicating a changing strategy rather than a loss of faith in India’s economy.

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