Foreign Institutional Investor (FII) Activity in Indian Equities: 2024–25
Key Points
- FII ownership in Indian equities stands around 16% in early 2025, down from 20% a decade ago.
- FII flows in 2024–25 were volatile: major selloffs in late 2024 and early 2025, with inflows resuming in April–May 2025.
- Sectors most influenced: BFSI, IT, with recent outflows from Financial Services and FMCG; inflows into Telecom.
- Select stocks like 360 One Wam and Ixigo show FII holdings above 50% as of Dec 2024.
- Key FII players: Government of Singapore, Norges Bank.
- Regulatory changes in 2024 aimed at streamlining FPI investments.
- Analysts expect FIIs to return if global headwinds ease, backed by India’s growth story.
Introduction
Foreign Institutional Investors (FIIs) are critical drivers of trends in the Indian stock market. Their buying or selling can swing valuations and trigger or calm volatility. This report examines FII ownership, investment patterns, sectoral influence, and outlook in FY2024–25.
FII Ownership and Market Influence
As of January 2025, FII ownership in Indian equities was around 16%, translating to about ₹67–68 lakh crore ($800 billion) in Assets Under Custody (AUC). This is down from 20.2% in 2015, driven by both increased DII participation and market diversification.
Despite the drop in percentage terms, FIIs continue to wield heavy influence on market sentiment and stock valuations. For context, India’s total market capitalization stood at ₹423–445 lakh crore in late 2024.
Recent FII Investment Trends (2024–25)
FII flows have been choppy due to global uncertainty, rising US bond yields, and high valuations.
| Month Net Equity Flows (₹ Crore) Remarks | ||
| Jan 2025 | -78,027 | Second-largest monthly outflow on record |
| Feb 2025 | -34,574 | Total FY25 outflows hit ₹115,635 crore |
| Mar 2025 | -3,973 | Stabilization phase begins |
| Apr 2025 | +4,223 | First positive net inflow in months |
| May 2025* | +11,778 | Strong buying trend observed |
*Data up to May 13, 2025. Source: NSDL, CNBC TV18, TOI, New Indian Express
These shifts are shaped by macroeconomic variables and investor perception of India’s risk-reward balance.
Sectoral Investment Patterns
Historically, FIIs have leaned heavily into BFSI and IT, but there’s been a clear sectoral rotation in early 2025:
- Outflows: Financial Services, FMCG, Automobiles
- Inflows: Telecom, selectively into Financial Services (late March)
Samco reports (Feb 2025) and other data highlight these shifts as FIIs reposition portfolios amid policy, earnings, and global rate cycle considerations.
High FII Exposure Stocks
Some Indian stocks have outsized FII ownership:
- 360 One Wam: Over 50% FII stake
- Ixigo: Over 50% FII stake
These levels signal institutional confidence but also mean vulnerability to FII sentiment swings.
Major FII Participants
Prominent FII investors in India include:
- Government of Singapore
- Norges Bank (Norway)
Their activity often signals global institutional positioning and sentiment.
Regulatory Landscape
In 2024, SEBI and the Indian government implemented reforms to simplify FPI registration, improve transparency, and enhance accessibility. These include:
- Unified KYC norms
- Easing restrictions for sovereign and pension funds
- Strengthened disclosures for high-risk FPIs
Outlook
Analysts anticipate a revival in FII flows if global macro conditions improve. Factors that could support renewed buying include:
- Softening US yields
- Moderating geopolitical tensions
- Stable INR outlook
- Strong GDP growth projections (6.5%+)
Domestic flows remain a strong counterbalance, reducing vulnerability to foreign capital volatility.
Conclusion
FII activity in 2024–25 has been a story of pullbacks and cautious return. While ownership percentages have declined, their market-moving power remains robust. With regulatory improvements and India’s long-term growth prospects, FIIs could resume a more constructive role in equity markets through FY2025.