Foreign Institutional Investors (FIIs) were net sellers in FY2025, offloading domestic equities worth Rs 1,27,401 crore. However, the intensity of selling eased considerably in March, with FIIs selling shares worth Rs 3,972.61 crore.
Meanwhile, Domestic Institutional Investors (DIIs) remained consistent buyers throughout the year, purchasing stocks worth Rs 6,06,368 crore, with March seeing buying activity of Rs 37,079.08 crore, according to an ET report quoting data from Ritesh Presswala.
On Friday, FIIs sold shares worth Rs 4,352.82 crore, while DIIs were net buyers, purchasing Rs 7,646.49 crore. Throughout the financial year, FIIs were net sellers on seven occasions, with the highest sell-offs occurring in October and January, when FIIs sold Rs 94,017 crore and Rs 78,027 crore, respectively.
FIIs were net buyers in June, July, August, September, and December, with the highest buying observed in September, amounting to Rs 57,724 crore.
DIIs were bullish on Indian equities throughout the year, with no month showing net selling activity. October and January saw the highest DII buying at Rs 1,07,255 crore and Rs 86,592 crore, respectively.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, observed that the shift in FII strategy—from sustained selling to modest buying—was visible in the week ending March 21, and it gained momentum the following week. This reversal in FII flows contributed to Nifty’s nearly 6% gains in March, ending a five-month decline, the longest streak since the index’s inception in 1996.
Vijayakumar attributed the change to three key factors: first, attractive valuations after a 16% decline in Nifty from the September peak to February; second, the appreciation of the rupee, which reversed the momentum trade towards US investments; and third, improvements in India’s macroeconomic indicators such as GDP, IIP, and CPI inflation, which paved the way for the market rally.
Going forward, the trend in FII flows will depend largely on the reciprocal tariffs the US is expected to impose on April 2. If the tariffs are not severe, the rally may continue.
Manoj Purohit, Partner & Leader at BDO India, pointed out another significant development. Sebi’s recent announcement regarding the FPI community could act as a sentiment booster. Based on the reactions from large banks regarding the restriction on P-Notes trading volume, the threshold for granular beneficial ownership disclosures has been increased from Rs 25,000 crore to Rs 50,000 crore.
FPIs with more than 50% of their portfolio in a single corporate group will continue to follow the earlier limit. This change is expected to bring back much-needed volume in trades and liquidity in the market.
Also, the Reserve Bank of India (RBI) is set to double the cap on investment by individual foreign investors in listed companies to 10%. This move aims to attract more capital inflows into the Indian market, according to senior government officials and documents reviewed by Reuters.
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