FIIs net sell $3 billion in June as DIIs absorb $9 billion in Indian equities
Synopsis
DIIs outbought FIIs by a ratio of 3-to-1 in June — absorbing $9 billion against $3 billion in foreign selling. But the 12-month picture is starker: FIIs have pulled $49.3 billion from Indian secondary markets while selectively entering through primary issuances. Domestic money is holding the floor, but for how long depends on earnings season and the monsoon.
Key Takeaways
FIIs were net sellers of $3 billion in June 2025 in Indian equities, per JM Financial Institutional .
DIIs countered with net purchases of $9 billion in the same period.
Over 12 months , FII net outflows from Indian secondary markets totalled $49.3 billion ; primary market inflows stood at $8.1 billion .
BFSI is the largest FII-held sector at 30.8 per cent of AUC, attracting $357 million in June inflows.
Key near-term triggers include monsoon progress , Q1FY27 earnings , crude oil prices, and US-Iran peace talks .
Foreign institutional investors (FIIs) turned net sellers to the tune of $3 billion in June 2025, even as domestic institutional investors (DIIs) stepped in as net buyers of $9 billion in the Indian equity market, according to a report by JM Financial Institutional released on Monday, 6 July. The data underscores a widening divergence between foreign caution and domestic conviction in Indian equities.
12-Month FII Flow Picture
Zooming out, the picture is more nuanced. Over the past 12 months, Indian primary markets recorded FII net inflows of $8.1 billion, while secondary markets bore the brunt of foreign selling, logging FII net outflows of $49.3 billion, according to the JM Financial Institutional report. This divergence suggests FIIs continue to participate selectively in new issuances — IPOs and QIPs — while consistently trimming exposure to listed stocks.
Sector-wise FII Holdings in June
BFSI, Capital Goods, Pharma, Auto, and Oil and Gas remained the top five sectors by FII shareholding in June, collectively accounting for 60 per cent of total FII assets in India. Among these, FII shareholding rose sequentially in BFSI and Pharma, while it declined in Capital Goods, Auto, and Oil and Gas.
As a share of FII assets under custody (AUC) in India, BFSI remained the largest at 30.8 per cent, up from 29.5 per cent in May. Capital Goods came second at 7.5 per cent (down from 7.6 per cent), while Pharma edged up to 7.4 per cent from 7.1 per cent in May.
In terms of June inflows by sector, BFSI attracted the most at $357 million, followed by durables at $204 million, services at $130 million, and realty at $85 million.
What Analysts Are Watching
Looking ahead, institutional flows are expected to remain sensitive to a range of domestic and global triggers. Analysts flagged the progress of the monsoon season as a key variable, given its direct bearing on rural demand, agricultural output, and inflation trends. The upcoming Q1FY27 corporate earnings season will also be closely tracked for signals on the health of corporate India and the durability of earnings growth.
On the global front, movements in crude oil prices and developments in US-Iran peace talks are seen as factors that could sway inflation expectations, energy costs, and broader risk sentiment, according to market watchers.
Risks and Market Outlook
While risks persist — including downward revisions to earnings growth estimates, monsoon-linked inflation concerns, and continued FII caution — analysts noted that much of the visible uncertainty appears to have been priced into current valuations. This, they argued, leaves room for a constructive interpretation of any incremental positive developments. Notably, DII buying at this scale signals that domestic funds see current levels as an accumulation opportunity, even as foreign investors remain on the sidelines.
Point of View
But the $49.3 billion in FII secondary-market outflows over 12 months is the story mainstream coverage is underplaying. Domestic institutions — largely mutual funds flush with SIP inflows — are structurally absorbing foreign selling, which has so far prevented a sharper correction. The real stress test comes if FII selling accelerates alongside a monsoon disappointment or an earnings miss in Q1FY27. India's retail-driven DII wall has held so far; its resilience at that inflection point is what markets should be pricing, not just the monthly net figures.
NationPress
6 Jul 2026
Frequently Asked Questions
How much did FIIs sell in the Indian equity market in June 2025?
FIIs were net sellers of $3 billion in the Indian equity market in June 2025, according to a JM Financial Institutional report. Over the past 12 months, their net outflows from secondary markets totalled $49.3 billion.
How much did DIIs buy in Indian equities in June 2025?
Domestic institutional investors (DIIs) were net buyers of $9 billion in the Indian equity market in June 2025, more than offsetting FII selling during the month.
Which sectors had the highest FII shareholding in June 2025?
BFSI, Capital Goods, Pharma, Auto, and Oil and Gas were the top five sectors by FII shareholding in June, together accounting for 60 per cent of total FII assets in India. BFSI alone held a 30.8 per cent share of FII assets under custody.
What factors will drive institutional flows in the coming months?
Analysts expect flows to hinge on monsoon progress, the Q1FY27 corporate earnings season, crude oil price movements, and developments in US-Iran peace talks. These factors will influence inflation expectations, rural demand, and overall risk sentiment.
Why are FIIs selling in secondary markets while buying in primary markets?
Over the past 12 months, FIIs recorded net inflows of $8.1 billion in primary markets (IPOs and QIPs) while pulling $49.3 billion from secondary markets. This suggests foreign investors are selectively participating in new issuances at negotiated valuations while trimming exposure to already-listed stocks amid valuation and macro concerns.
