FPI net sell $(3.99) Billion in Indian equities in August 2025

4 Sep 2025 , 02:03 PM

FPIS NET SELL $(3.99) BILLION IN AUGUST 2025

FPIs sold equities worth $3.99 Billion in August, and have now sold $6.02 Billion in equities in July and August combined. With the US imposing 50% punitive tariffs on Indian exports, nearly $50 billion of exports will be impacted. This led to heavy FPI offloading. In August 2025, FPIs net sold $(2.40) Billion in the first fortnight; and $(1.59) Billion in the second fortnight of the month.

August data saw inflation once again at a multi-year low, even as core sector and IIP showed signs of picking up. However, the big positive surprise came from the Q1FY26 GDP growth at 7.8%, which is 130 bps above street estimates. Manufacturing did well, but the real alpha came from a bounce in service sector. Towards the end of August, the only concern was the spike in fiscal deficit, which looks to spill beyond 4.4% of GDP.

FPI AUC AGAIN FALLS IN AUGUST 2025

Between June 2025 and August 2025, FPI equity AUC fell sharply from $867 Billion to $801 Billion. FPI Equity AUC is now -14.0% below the peak of $931 Billion in September 2024. Combined FPI AUC at $822 Billion is also well below September 2024 peak of $1.04 Trillion.

Industry Group	FPI AUC (Aug-25) ($ Billion)	FPI AUC (Jul-25) ($ Billion)
Financials (BFSI)	246.46	260.07
Automobiles and Auto Components	60.70	57.29
Information Technology (IT)	58.68	60.63
Healthcare and Pharmaceuticals	55.14	57.50
Oil & Gas	55.03	57.71
Fast Moving Consumer Goods (FMCG)	46.28	45.57
Capital Goods	42.28	43.33
Telecommunications	39.59	39.86
Consumer Services	37.69	36.87
Power (generation and transmission)	25.87	27.51
Metals and Mining	22.74	23.20
Consumer Durables	21.68	21.69
Services	19.19	19.57
Chemicals	15.25	15.73
Realty	14.99	15.85
Cement	14.59	14.18
Construction	13.87	14.04
Top 17 Sectors	790.02	810.61
Other 6 sectors	10.50	11.35
Total FPI AUC	800.52	821.96

Data Source: NSDL

These are the top 17 sectors where FPI AUC is above $10 Billion as of August 2025. Out of the 23 sectors identified by NSDL, AUC of top-17 sectors accounted for 98.7% of total FPI equity AUC of $800.52 Billion. FPI AUC fell in July and August, and is now well below the peak AUC of $931 Billion in Sep-24. Here are drivers of AUC change in August 2025?

At $246.46 Billion, BFSI dominates AUC. The sectors with highest MOM accretion in AUC were; Automobiles (6.0%), Cement (2.9%), Consumer Services (2.2%), and FMCG (1.6%). Sectors that saw depletion in AUC on MOM basis were Power (-6.0%), Realty (-5.4%), Financials (-5.2%), Oil & Gas (-4.6%), Healthcare (-4.1%), and IT (-3.2%).

SECTORAL POCKETS OF FPI BUYING IN AUGUST 2025

In August 2025, FPIs were net sellers worth $(3.99) Billion. Here are the major sectors with positive FPI flows in August 2025.

FPI Net Buying in Sectors	H1-Aug-25 ($ Million)	H2-Aug-25 ($ Million)	Aug-25 ($ Million)
Telecom	+851	-191	+660
Cement	+193	+89	+282
Services	+4	+224	+268
Capital Goods	+129	+87	+216
Automobiles	-93	+298	+205
Chemicals	+47	+132	+179
Construction	+158	-2	+156

Data Source: NSDL

Despite the heavy FPI selling overall, there were several sectors with big inflows. Telecom continued to attract FPI buying as Bharti remained a preferred stock. Cement and Construction saw traction on smart core sector numbers. Capital goods buying was more a bet on domestic revival of capex in next few quarters. The surprise pack was automobiles. It gained substantially from two factors. Firstly, RBI is likely to reduce risk weights on auto loans. Secondly, autos to gain from the proposed changes in the GST rates. Two and four-wheelers may get cheaper, with easier funding.

BIG BANG SELLING IN BFSI, IT, HYDROCARBONS

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

FPI Net Selling in Sectors	H1-Aug-25 ($ Million)	H2-Aug-25 ($ Million)	Aug-25 ($ Million)
Financial Services (BFSI)	-1,540	-1,117	-2,657
Information Technology (IT)	-729	-558	-1,287
Oil & Gas	-468	-230	-698
Power	-270	-194	-464
Consumer Durables	-129	-95	-224
Healthcare	-239	+77	-162
Realty	-138	-4	-142

Data Source: NSDL

The selling theme for FPIs in August 2025 was dominated by BFSI, which sold off $2.66 Billion on macro concerns over tariff imposition. FPIs also aggressively pared positions in IT as global IT spending faced headwinds. Despite gains for OMCs, oil sector saw FPI outflows due to volatile crude prices.

OUTLOOK FOR FPI FLOWS IN COMING MONTHS

What determines colour of FPI flows in coming months? Firstly, punitive tariffs at 50% will be negative for export-oriented businesses like textiles, jewellery, shrimps, handicrafts, and chemicals. The GDP data and the CAD data are positives, but that will be circumscribed by concerns over the addition of ₹4.55 Trillion to fiscal deficit in June and July 2025.

While Indian response to tariffs is critical, short-term pain is inevitable. FPIs will be eyeing other data points in September and October. US unemployment worsened to 4.3%, paving the way for a Fed rate cut in September. Fed will also update its long-term macro projections in September. The big X-factor will be the rupee which weakened beyond ₹88.20/$. That could hold the key to FPI investment sentiments.