FPI sell-off hits IT, Financials, Capital Goods in April; Telecom, FMCG attract inflows

Foreign Portfolio Investors (FPIs) maintained a cautious approach towards Indian equities in the first half of April 2025, offloading a net ₹33,927 crore across sectors, as per data from the National Securities Depository Limited (NSDL). The bulk of the outflows were concentrated in sectors such as Information Technology (IT), Financial Services, and Capital Goods.

However, the trend saw a reversal in the latter part of the month. As of April 22, total FPI outflows from Indian equities stood at ₹17,036 crore, indicating a moderation in selling pressure, according to NSDL data.

Here’s what FPIs sold and bought the most during the first fortnight of April 2025.

Sectors Seeing the Heaviest Outflows

Topping the FPI selling list was the Information Technology (IT) sector, with FPIs withdrawing a whopping ₹13,828 crore. Persistent global macroeconomic uncertainty, weak demand outlook from the US and Europe, and profit-booking after recent rallies may have contributed to the steep outflows.

The Financial Services sector saw the second-largest outflow of ₹4,501 crore. Despite India’s stable banking fundamentals, FPIs appeared to be reducing exposure, possibly amid concerns around global interest rate volatility and elevated valuations in some private banks.

Capital Goods sector followed, witnessing an FPI outflow of ₹3,019 crore. Meanwhile, sectors like Metals & Mining (- ₹2,829 crore), Oil & Gas (- ₹2,759 crore), and Automobiles (- ₹2,562 crore) also bore the brunt of FPI selling, signaling a broad-based risk-off sentiment.

Healthcare, Services and Consumer Durables sectors saw FPI outflows worth ₹1,384 crore, ₹1,175 crore and ₹1,026 crore, respectively, during the first half of April 2025, NSDL data showed.

Where Did FPIs Buy?

Despite the overall selling pressure, a few sectors managed to attract FPI interest. The Telecommunication sector emerged as the top gainer, registering net inflows of ₹2,137 crore during April 1 to 15, NSDL data showed.

The Fast-Moving Consumer Goods (FMCG) sector also saw healthy inflows of ₹587 crore, as investors turned to defensive plays amid heightened market volatility.

Among other sectors, Media & Entertainment attracted ₹103 crore, followed by Power with ₹29 crore and Diversified with ₹28 crore in inflows. These modest investments suggest selective bottom-fishing and a rotation into relatively stable and undervalued segments.

What’s Driving the Reversal in FPI Sentiment?

According to Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, the recent reversal in FPI flows can be attributed to two key macroeconomic factors.

“This reversal in FII activity has been caused by two important factors. One, decline in the dollar index to around 100 level and the expectation of further weakness in the dollar are nudging FIIs away from the US to emerging markets like India. Two, both the US and China will report subdued growth this year while India is expected to clock a growth rate of 6% in FY26 even in an unfavourable global environment,” he said.

Dr. Vijayakumar noted that this relative outperformance of India’s economic growth could potentially translate into outperformance in equity markets, thereby supporting sustained FPI inflows despite prevailing global uncertainties.

He further added that investor focus—both domestic and foreign—is likely to remain concentrated on domestic consumption-driven sectors. These include financial services, telecommunications, aviation, cement, select automobile segments, and healthcare, all of which are expected to benefit from structural demand and resilient growth fundamentals.

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