FPI net sell $2,494 Million in Indian equities in December 2025

30 Dec 2025 , 10:55 AM

FPI SELLING – WHAT IT IS AND WHY IT MATTERS?

Foreign Portfolio Investors (FPIs) were aggressive sellers in equities in December in particular and year 2025 in general. There are several reasons why FPIs have been net sellers in India. Firstly, there are the valuation concerns with the Buffett Ratio at around 130%, against the normal average of 90-100%. That has led to substantial flows out of India and into other emerging markets like China, Taiwan, Korea etc. Secondly, the rupee weakness tends to reduce dollar returns for FPIs. With the USDINR at 90/$, there is an obviously tendency among FPIs to sell Indian stocks. Then, of course, there is the delay in an Indo-US trade deal and the impact of punitive tariffs imposed by the US on Indian exports.

How much does FPI selling matter to markets. Let us look at the numbers. In a year, when FPIs sold Indian equities worth $18.8 Billion in Indian equities, the Nifty ended 10.5% higher. That can be largely explained by the fact that domestic Indian institutions bought Indian stocks worth $75 Billion, or 4X the FPI selling. Having said that, FPI selling does subdue market returns for two reasons. Firstly, FPI selling impacts the equity stock prices and also the rupee value. Secondly, FPIs have substantial exposure to the large caps, so any selling in the large caps tends to put pressure on the Nifty and the Sensex. Let us first look at how the Assets Under Custody (AUC) of FPIs panned out in December 2025?

FPI AUC TAPERS IN DECEMBER 2025

FPI equity AUC edged lower in December 2025. FPI equity AUC at $826 Billion and the overall AUC at $905 Billion are still way below the September 2024 peak AUC levels.

Industry Group	FPI AUC (Dec-25) ($ Billion)	FPI AUC (Nov-25) ($ Billion)
Financials (BFSI)	262.83	266.37
Automobiles and Auto Components	63.93	63.90
Oil & Gas	63.28	62.82
Information Technology (IT)	59.81	57.95
Healthcare and Pharmaceuticals	52.32	54.46
Capital Goods	46.26	46.78
Telecommunications	45.22	45.13
Fast Moving Consumer Goods (FMCG)	40.80	41.74
Consumer Services	32.80	33.65
Metals and Mining	27.58	25.44
Power (generation and transmission)	25.39	26.10
Consumer Durables	20.39	21.12
Services	18.24	20.05
Construction	15.21	15.21
Chemicals	14.54	14.47
Realty	14.11	14.72
Cement	12.82	12.88
Top 17 Sectors	815.53	822.78
Other 6 sectors	10.37	10.92
Total FPI AUC	825.90	833.70

Data Source: NSDL

These are the top 17 sectors with FPI AUC above $10 Billion as of October 2025. Out of the 23 sectors identified by NSDL, AUC of top-17 sectors accounted for 98.7% of total FPI equity AUC of $825.90 Billion. Here are the sectoral drivers of AUC change in December 2025?

The sectors with highest MOM accretion in AUC were; Metals (8.4%), Infotech (3.2%), Oil & Gas (0.7%), Chemicals (0.5%), and Telecom (0.2%). AUC depletion was seen in Services (-9.0%), Realty (-4.1%), Healthcare (-3.9%), Consumer Durables (-3.5%), and Power (-2.7%).

CONSUMER SERVICES, METALS AND OIL LEAD FPI BUYING IN DECEMBER

Here are the major sectors with positive FPI flows in December 2025.

FPI Net Buying in Sectors	H1-Dec-25 ($ Million)	H2-Dec-25 ($ Million)	Dec-25 ($ Million)
Consumer Services	-5	+377	+372
Metals & Mining	+89	+242	+331
Oil & Gas	+331	-72	+259
Others	+101	+37	+138
Information Technology	-367	+496	+129

Data Source: NSDL

Even in a month when the FPI selling was to the tune of $2.94 Billion, there were pockets of buying. Consumer services led by stocks like Eternal, Swiggy, and recently listed Meesho did managed to corner a lot of FPI attention. Metals was another key space. Year 2026 is likely to see a shift from precious metals to industrial metals and that rubbed off. Also, a recovery in China is raising hopes for metal stocks. Low crude oil prices around $60/bbl is boosting the gross refining margins (GRMs) as well as marketing margins for downstream. The surprise package in the month was the buying in IT, which saw a lot of year-end adjustment buying by the FPIs. However, FPIs sold nearly $8 billion of IT stocks in year 2025.

BFSI AND FMCG TRIGGER THE SELL-SIDE STORY

Here is a sectoral break-up of FPI net outflows from Indian equities in November 2025.

FPI Net Selling in Sectors	H1-Dec-25 ($ Million)	H2-Dec-25 ($ Million)	Dec-25 ($ Million)
Financial Services (BFSI)	-718	-446	-1,164
Fast Moving Consumer Goods (FMCG)	-156	-492	-648
Services	-357	-116	-473
Healthcare	-259	-71	-330
Power	-233	-71	-304
Capital Goods	-134	-150	-284
Automobiles and Components	67	-295	-228

Data Source: NSDL

There were several major sell candidates in December 2025. Leading the pack was BFSI, with most FPIs paring stakes in banks and NBFCs. FMCG has been facing demand issues as well as the impact of input tax credit. Tobacco stocks coming under pressure has been long expected. Others lie power and healthcare was more of year-end adjustment of exposures. A lot of the India-specific domestic stories saw heavy selling in December 2025.

KEY TAKEAWAYS FOR INVESTORS FROM THE DEC-FPI STORY

FPIs have sold $2.94 Billion in equities in December and around $18.8 Billion in the year 2025. Here is what investors need to focus on from the FPI data.

• While FPIs sold equities were $18.8 Billion in 2025, domestic institutions were buyers worth $73 Billion. This enabled the Nifty to close with 10.5% gains for the year.
• However, healthy FPI flows are critical as they pertain to large caps and also because the FPI flows have a direct bearing on the Indian rupee too.
• Metals saw the best AUC accretion while services saw the sharpest AUC depletion during the month of December 2025. Investors need to form strategies accordingly.
• FPIs have shown a preference for digital ecommerce stocks and for metal & mining stocks even amidst heavy selling in other sectors.
• FPI selling was a lot more prominent in domestic India-specific sectors than in the globally exposed sectors. However, this could be a year-end adjustment.

 

LLM Summary FPIs were net sellers in equities to the tune of $2.94 Billion in December 2025 and $18.8 Billion in full year 2025. FPI selling was concentrated in secondary market equities, while they were aggressive buyers in IPOs and also in debt markets. Some of the key reasons for the heavy FPI selling in the month of December were the regular year end effect and a delay in the Indo-US trade deal. FPIs are also concerned about stiff valuations in India on relative basis, as well as the rather volatile rupee. Previous months had seen a trend of FPIs buying into domestic stories like BFSI. However, December saw heavy selling in BFSI. Also globally exposed sectors like metals saw bulk of the FPI buying in December. It remains to be seen if this is a shift in trend or an aberration. Going ahead, FPI flows into Indian equities will be determined by geopolitical risk (in the light of Venezuela), recovery in demand and earnings in India. FPIs would also prefer stability in the rupee to commit fresh funds to Indian equities.