Have FIIs Sold Rs 1 Lakh Crore in Indian Equities Since July? Analysts Weigh In on Trend Reversal
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Synopsis
Foreign institutional investors have significantly impacted Indian equities by divesting over Rs 1 lakh crore since July. However, domestic inflows are offering respite. As signs of a market turnaround emerge, will FIIs shift their strategy? This article explores the latest trends and predictions from market analysts.
Key Takeaways
- FIIs have net sold Rs 1 lakh crore since July.
- Domestic inflows are providing necessary support.
- Analysts see potential for a market turnaround.
- DIIs have been active net buyers since August.
- Corporate earnings growth remains a concern.
New Delhi, Sep 13 (NationPress) Foreign institutional investors (FIIs) have divested more than Rs 1 lakh crore from Indian equities since July, affecting market sentiment; however, steady domestic inflows have provided some support, as per provisional data from stock exchanges.
This sell-off, motivated by disappointing earnings, inflated valuations, and uncertainties surrounding US tariffs, has led to a range-bound movement in indices.
From July 1 to September 8, FIIs have liquidated equities amounting to Rs 1.02 lakh crore, with Rs 7,800 crore sold during the first six trading sessions of September.
Looking ahead, analysts anticipate that FIIs may scale back their selling or even begin purchasing again, as signs of a market turnaround emerge due to repo rate cuts and GST reforms, according to VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited.
In 2025, FIIs recorded a net sale of Rs 2.18 lakh crore, while domestic institutional investors (DIIs) countered this with net purchases totaling Rs 5.37 lakh crore. DIIs have consistently been net buyers in the cash market since August 2023.
FIIs continued their selling trend in September, with a sell figure of Rs 11,169 crore up to September 13, based on NSDL data.
The sluggish growth in corporate earnings has been a significant driver of FII outflows. Analysts noted that while small- and mid-cap valuations remained elevated in August, large-cap stocks have adjusted towards long-term averages.
According to Vijayakumar, higher valuations in India compared to markets like China, Hong Kong, and South Korea have prompted FIIs to sell in India and allocate funds to more affordable markets. This approach has proven advantageous this year as those markets have significantly outperformed India.
India's GDP growth saw a robust rebound in Q1, and reforms such as budget tax cuts, rate cuts by the MPC, and GST rationalization have the potential to maintain growth momentum, he stated.
Although earnings growth is expected to be modest in the 8 to 10 percent range for FY26, there is a strong possibility of exceeding 15 percent earnings growth in FY27, which could lead to a shift in FPI sentiment, he concluded.
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Point of View
It is crucial to remain objective while analyzing the current trends affecting our economy. The consistent outflows from FIIs reflect global investor sentiment, and while domestic support offers some cushioning, we must focus on sustainable growth through effective policies and reforms.
NationPress
13/09/2025
Frequently Asked Questions
What factors have led to FIIs selling Indian stocks?
The main factors include lackluster earnings, stretched valuations, and uncertainties surrounding US tariffs.
How much have FIIs sold since July?
FIIs have sold over Rs 1 lakh crore in Indian equities since July.
What are the expectations for future FII behavior?
Analysts predict that FIIs may reduce selling or even become buyers as signs of a market turnaround appear.
What role do domestic institutional investors play?
Domestic institutional investors (DIIs) have countered FII outflows with significant net purchases.
What indicators suggest a turnaround in the market?
Indicators include repo rate cuts and GST reforms alongside rebounding GDP growth.
