FPIs Sell Equities Worth $2.5 Billion in December 2025

Foreign Portfolio Investors (FPIs) have been selling off Indian equities at an alarming rate in December 2025, to the tune of $2.5 billion. This has added to an already significant sell-off for the year, with FPIs net sellers by $18.8 billion for the entirety of 2025. Despite substantial inflows into major IPOs - nearly $8.2 billion - the secondary market has witnessed close to $27 billion in selling. Let’s break down the key drivers behind this trend and its impact on the Indian stock market.

FPI Selling Story: December 2025 Overview

The month of December is traditionally not one where FPIs actively sell off large portions of their holdings in emerging markets, as it distorts their year-end performance. However, December 2025 proved to be an exception. Along with the $2.5 billion in selling during the first half of December, FPIs were net sellers throughout the year, adding to a significant $18.8 billion sell-off despite the $8.2 billion IPO inflows.

So, what’s driving this massive selling?

• Valuation concerns: The market's rising valuations, especially after a series of bullish rallies in 2023–24, have caused FPIs to rethink their positions in India.
• Earnings slowdown: Many FPIs believe that India’s earnings growth is not aligning with stock price appreciation.
• Geopolitical risks: Tensions in international markets, especially related to tariffs and supply chain disruptions, have spooked investors.
• Weak Rupee: The Indian rupee's decline, crossing ₹90/$ at one point, has also contributed to FPI nervousness. The currency weakness puts pressure on FPI returns, especially when repatriating funds.

Let’s look deeper into the sectoral data behind the $2.5 billion sell-off in December.

Breakdown of December 2025 FPI Flows

FPI flows in December 2025 were driven by a mix of sector-specific factors, with some sectors seeing positive flows and others bearing the brunt of FPI selling.

Sectoral FPI Flows (December 2025)

Data Source: NSDL (All figures are $ Million)

What Are the Three Key Segments in December FPI Flows?

1. Green Segment (Positive Flows): These sectors saw net buying, including oil & gas, metals, and consumer services (mainly e-commerce). These flows were driven by secondary market purchases as well as IPOs.

2. Yellow Segment (Neutral Flows): Sectors that saw no clear trend in FPI buying or selling in December, possibly reflecting sectoral adjustments due to year-end portfolio realignment.

3. Pink Segment (Maximum Selling): The sectors that saw the most aggressive FPI selling, especially BFSI with $1.12 billion in selling. Other sectors in this category included FMCG, services, and construction.

What Does This Mean for Indian Markets?

Unlike in previous months, when FPI actions were driven by domestic versus global themes, the December trend seems more focused on profit-booking and year-end portfolio adjustments. The absence of strong buying in key sectors like IT, BFSI, and healthcare raises concerns about investor sentiment in these sectors.

While this sell-off could put near-term pressure on Indian equity markets, especially in FMCG, BFSI, and services, it’s important to consider that FPIs have been adjusting their portfolios in a volatile market. January FPI data will likely provide more clarity on whether this trend will continue into the new year.

Key Takeaways

• FPIs sold $2.5 billion worth of equities in December, contributing to an overall $18.8 billion net sell-off in 2025.
• Despite $8.2 billion inflows from large IPOs, FPI selling in the secondary market was significant, totaling $27 billion for the year.
• Key sectors such as BFSI, FMCG, and services saw the largest selling pressures.
• Positive flows were observed in oil & gas, metals, and consumer services.
• December’s FPI selling was largely driven by year-end portfolio adjustments rather than sector-specific issues.

Disclaimer: This article is for informational purposes only and does not constitute financial, investment, or economic advice. The views expressed are based on available data and are subject to change based on future developments.