Amid this sell-off, the BSE IT index has declined sharply by 17.6%, Power sector fell by 6%, and FMCG dropped 1.5%, while the benchmark Sensex bucked the trend, gaining 4.5% during the same period.
On the sectoral front, Information Technology (IT) bore the brunt of the sell-off, with FIIs offloading Rs 56,881 crore, making it the most dumped sector this year. The sell-off was consistent, with only one month (Feb’25) of positive inflow.
Following closely were Fast Moving Consumer Goods (FMCG) and Power, which saw net FII outflows of Rs 17,770 crore and Rs 17,718 crore, respectively.
Interestingly, Consumer Durables witnessed net FII selling in all 8 months of CY25, totaling Rs 15,643 crore, indicating no respite in investor sentiment toward the sector. Similarly, Healthcare saw selling in 7 of the 8 months, with a minor inflow only in March, ending with a net outflow of Rs 11,642 crore.
Beyond FII Outflows, The Deeper Market Story:
Despite these sustained outflows, Amit Premchandani, Fund Manager (Equity) at UTI AMC, stresses that the market story runs deeper than headline FII flows. He highlights that “valuations, earnings quality, and sectoral opportunities matter more than short-term flows,” and points out that large caps, BFSI, healthcare, and autos remain attractive bets amid current volatility. Click here
In contrast, Telecommunication emerged as the top gainer, attracting steady FII inflows every single month of CY25 — an impressive Rs 35,604 crore. Services, buoyed by significant interest in May and July, registered inflows of Rs 11,135 crore. Meanwhile, Chemicals managed to garner attention with Rs 7,389 crore in net inflows. Though Media & Entertainment was in the green in 6 of the 8 months, the quantum of flows remained relatively small at Rs 720 crore, underlining the limited scale of investments in niche sectors.
Financial Services, typically a strong FII favorite, saw a rollercoaster year — massive inflows in March and April were reversed by steep outflows in January, July, and August. The sector remains in negative territory overall with a net outflow of Rs 5,654 crore. Automobile & Auto Components and Capital Goods also faced pressure, ending with net outflows of Rs 15,436 crore and Rs 5,602 crore, respectively.
FIIs Shift to Small & Mid-Caps:
Vivek Rajaraman, Executive Director and Head – Client Advisory at Waterfield Advisors, explains that while FIIs are withdrawing from large-cap stocks, “the so-called smart money is quietly shifting towards India’s small and mid-cap space.” He elaborates that FIIs are taking a more selective approach, focusing on sectors drawing their attention, even as domestic investors cushion markets amid persistent global uncertainties. Click here
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
