FPIs Pull Out $1.4 Billion from IT, FMGC, and Automobile Stocks in First Half of March

Foreign portfolio investors (FPIs) have continued to cut their exposure to Indian equities as concerns grow over a potential economic slowdown in the US and reduced discretionary spending by global software clients.

This has led to significant outflows from key sectors, particularly IT, FMCG, and automobiles.

IT Sector Hit Hardest by FPI Outflows

In the first two weeks of March 2025, FPIs offloaded IT stocks worth nearly $800 million, making it the most affected sector.

The selloff reflects growing caution among investors as global IT spending faces headwinds due to economic uncertainties in the US and Europe.

Other major sectors impacted include fast-moving consumer goods (FMCG), which saw outflows of $586 million, and automobiles, where investors pulled out $418 million, according to data from the National Securities Depository Ltd (NSDL).

Total FPI Selloff Reaches $3.4 Billion

Between March 1 and March 15, 2025, FPIs net sold $3.4 billion worth of Indian shares, with IT stocks alone accounting for nearly a quarter of the total outflows.

However, Metals & Mining and Media & Entertainment sectors bucked the trend, attracting net inflows of $135 million and $16 million, respectively, as investors sought safer alternatives amid market volatility.

FPI Holdings in Indian Equities

Despite the recent selloff, foreign investors still maintain a substantial presence in Indian equities. As of March 15, 2025, FPIs held $722 billion worth of Indian stocks, accounting for 15.3% of the total market capitalisation.

While nearly one-third of all FPI investments remain concentrated in the financial sector, the IT sector ranks second, but with a much lower share of 9.4%.

Conclusion

Despite significant FPI outflows from IT, FMCG, and automobile sectors, foreign investors continue to hold a strong presence in Indian equities.

While market volatility persists, sectors like Metals & Mining and Media & Entertainment have attracted inflows.

The financial sector remains dominant, but shifting global trends may further impact FPI investment patterns in the coming months.

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