India set to log record FII outflows as net sale hits Rs 1.58 lakh crore in 2025

Foreign Institutional Investors (FIIs) are poised to end 2025 with a record-breaking exodus from Indian equities, marking the steepest net outflows ever seen in the country’s capital markets. As of December 27, FIIs have sold equities worth Rs 22,130 crore through the exchanges, taking the cumulative equity selling in calendar year 2025 to Rs 2,31,990 crore.

Meanwhile, investments via the primary market stood at Rs 73,583 crore, bringing the net FII outflow figure to a staggering Rs 1,58,407 crore, the worst annual net selling by FIIs since they began investing in India.

VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted the scale of the outflows, stating, “As the year 2025 draws to a close, FII selling in India is on track to set a new record in FII outflows… This is the worst selling by FIIs since they started investing in India.”

He noted that while FII activity was relatively balanced in the previous year, with primary market investments offsetting exchange-based selling, 2025 has seen a sharp divergence.

“In 2024 also, FIIs have also been selling through the exchanges. They sold equity for Rs 1,21,210 crores. However, for the year as a whole, the net FII inflow was positive since they had invested Rs 1,21,637 crores through the primary market. But for 2025, the net sales figure is a massive Rs 1,58,407 crores,” he explained.

Vijayakumar further attributed the intense selling pressure to the weakening of the Indian rupee. “The sustained selling by FIIs has contributed significantly to the sharp depreciation in INR this year,” he said, adding that prospects for a turnaround are beginning to emerge.“Improvements in fundamentals are likely to attract net FII inflows in 2026. Robust GDP growth and prospects of improvement in corporate earnings in 2026 augur well for positive FII flows in 2026,” he said.The historic scale of outflows comes despite steady domestic participation and resilient economic indicators, highlighting the complex interplay of global capital flows, currency dynamics, and investor sentiment at the close of 2025.

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