Athira Sethu
Kochi, 26 Dec 2025
FIIs have pulled out a record amount of money from Indian stock markets in the year 2025. Till now, they have pulled out nearly Rs 1.6 lakh crore, making this one of the strongest sell-offs seen in recent years. This has raised a few questions on whether the situation could get worse before the end of this year.
Sectors Most Affected
- IT faced the maximum destruction, where FIIs withdrew as much as Rs 79,000 crore.
- FMCG companies saw outflows of about Rs 32,000 crore.
- The power sector alone suffered an estimated loss of almost Rs 26,000 crore.
- Healthcare stocks witnessed outflows of more than Rs 24,000 crore.
- Heavy selling was also witnessed in consumer durables and consumer services.
- Other sectors that were affected by the slowdown include real estate, financial services, and automobiles.
Where Is the Money Going?
- Experts said the FIIs are moving money to more promising global markets like the US, China, Japan, and Europe.
- These markets gave better returns compared to India in 2025.
- While Indian markets saw average returns, global markets rose between 12% and 60%.
- Sectors That Gained Money
- Few sectors were attractive for foreign investment.
- Telecom stocks were strong with inflows of over Rs 47,000 crore.
- Oil and gas also witnessed some buying, along with certain service-related sectors.
Will Foreign Investors Return?
- Some do think that selling will slacken or grind to a halt.
- This factor may help money flow back to emerging markets like India in the wake of expected US interest rate cuts.
- Inflows may also be supported by a weaker US dollar.
- The Indian markets are expected to yield better returns than US markets in the times to come.
Role of IPOs and Domestic Investors
- Instead, it put in oodles of money in IPO launches rather than buying in the open market.
- They put around 40% of the money they sold into IPOs.
- Indian mutual funds continued to see strong monthly SIP investments.
- However, most of this money went into large-cap stocks and IPOs, which left the mid- and small-cap stocks under pressure.
Outlook for 2026
- Some brokerages said that 2026 could be far better for Indian markets.
- Growth may start shifting from expensive valuations toward actual earnings growth.
- Experts advise a ‘buy on dips’ strategy for long-term investors.
Sectors to Watch Ahead
- Higher credit growth will help banks and other financial companies.
- IT stocks may bounce back after sharp price correction.
- Health is considered a safer option when the markets are not stable.
- Real estate and capital goods might be the hottest sectors in the years to come.
Overall, though, the year 2025 has been tough for Indian markets; experts believe that patient investors may see better opportunities ahead.
