FII shareholding in Indian stock market hits decade-low of 16%; Banking, IT lead sectoral outflows in January 2025

Foreign Portfolio Investors (FPIs) sold Indian equities worth over ₹78,000 crore in January 2025, marking a continuation of their aggressive selling spree after a brief pause in December 2024. FPI selling also continued this month, as outflows till February 10 stood at ₹7,342 crore, as per data available on National Securities Depository Limited (NSDL).

Unlike November and December 2024, which witnessed contrasting trends within the month, January 2025 saw relentless selling pressure, with Foreign Institutional Investors (FIIs) offloading stocks on 22 out of 23 trading sessions.

Since October 2024, when FIIs began their extensive sell-off in the Indian stock market, they have offloaded Indian equities worth ₹1.7 lakh crore. In January 2025, FIIs remained net sellers across almost all sectors, with the exception of chemicals, media, and telecom, according to a report by JM Financial.

Top Sectors with Highest FII Buying and Selling in January 2025

FIIs continued their aggressive selling in January 2025, with significant outflows concentrated in key sectors. The BFSI and IT sectors witnessed the highest outflows of $2.8 billion and $747 million, respectively. Notably, both sectors had recorded net inflows in December 2024, indicating a sharp reversal in investor sentiment.

Oil & Gas and Automobiles also remained under pressure, marking their fifth and sixth consecutive months of net outflows, respectively. FIIs offloaded $182 million in Oil & Gas and $672 million in the Auto sector, according to a report by JM Financial.

After being net buyers in December 2024, FIIs turned net sellers in key sectors such as Capital Goods, BFSI, Pharma, IT, and Realty in January 2025.

On the other hand, only a few sectors witnessed marginal inflows. The Chemicals, Media, and Telecom sectors saw negligible net buying of $41 million, $20 million, and $16 million, respectively.

FII Shareholding in Indian Equities: A Decade-Low Trend

FII ownership in Indian equities has continued its downward trajectory, falling from 20.2% in January 2015 to 16.0% in January 2025, slightly below the 16.1% recorded in December 2024.

As of January 2025, FII shareholding stood at 16.0%, reflecting a marginal sequential decline and remaining flat compared to October 2024, which marked a 12-year low. On a year-on-year (YoY) basis, FII ownership has declined from 16.3% in January 2024, highlighting sustained selling pressure.

Furthermore, FII Equity Assets Under Custody (AUC) fell to ₹67.7 lakh crore as of end-January 2025, down 5% from ₹71.1 lakh crore in December 2024, underscoring the impact of continued outflows on FII holdings in the Indian market.

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