New Delhi: Selling by foreign institutional investors (FIIs) intensified in early November, with total sales exceeding Rs 13,925 crore by the weekend, according to NSDL data released on Saturday. Analysts noted that weaker earnings in India relative to other markets have fueled the sell-off, as investments are being shifted to the US, China, Taiwan, and South Korea, which are seen as beneficiaries of the current AI trade. However, concerns about a potential bubble in AI stocks suggest that this trend may not last long, and once the AI trade slows, India is likely to see a resurgence in FII inflows, according to Dr.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, although he cautioned that the timing of such a shift is uncertain. The long-term trend shows continued FII investment in the primary market, with Rs 7,833 crore invested so far in November. For 2025, total FII sales through exchanges have reached Rs 2,08,126 crore, while total purchases in the primary market stand at Rs 62,125 crore. Manoj Purohit, Partner and Leader of Financial Services Tax at BDO India, mentioned that FPI investment trends are experiencing ongoing volatility, yet there are signs of recovery ahead. Key contributors to this optimistic outlook include record domestic sales during the festive season, continuous corporate earnings growth, and discussions regarding India-US trade agreements.
He also highlighted several reforms and SEBI initiatives that support this positive trend, such as KYC alignment, simplified account regulations, and the introduction of a single-window India Market Access platform. Concurrently, the persistent selling has reduced FPI ownership in NSE-listed companies to 16.9% in the September quarter, the lowest level seen in over 15 years.
