Commenting on the current trends, VK Vijayakumar, Chief Investment Strategist at Geojit Investments, called this the worst selling by FIIs since they started investing in India.The year 2025 ended on a grim note for foreign investors with FIIs posting record share sales in India while selling shares worth Rs 2.40 lakh crore in the secondary markets in CY2025, Vijayakumar said, highlighting that their equity investment of Rs 73,909 crore through the primary market during the year, however, reduced the impact.
In December alone, FIIs sold shares worth Rs 30,332 crore in the secondary markets.
Usual culprits
Vijayakumar blamed India’s relatively high valuations and the AI business as major factors behind FII’s exodus in the past year. Their continued selling has also contributed to a significant decline in the Indian rupee against the US dollar.
The INR was the worst performing major currency this year, falling almost 5% over the year.
FII snapshot from 2025
FIIs sold shares worth Rs 11,766 crore in the third quarter after selling shares worth Rs 76,619 crore in the third quarter of CY25. They reversed the buying trends of the April-June period when inflows were Rs 38,673 crore. The year had started sharply on a negative note with foreign investors pulling out a huge Rs 1,16,574 crore in the January-March quarter.
Outlook for 2026
Vijayakumar expects that 2026 is likely to witness some changes in the FII strategy. “A significant improvement in fundamentals in India is likely to attract net FII inflows in 2026. Robust GDP growth and prospects of improving corporate earnings in 2026 bode well for positive FII flows in 2026,” the Geojit analyst said.
Nilesh Jain, Head Vice President – Equity Research at Centrum Broking, said he expected 2026 to be better than 2025, while pegging Nifty’s December 2026 target at Rs 29,731, implying an upside of 13%. Improving macro indicators, stronger GDP growth in the second quarter, favorable inflation and an end to corporate profit cuts support the positive view, he said.
India underperformed and was at the bottom of the table with only 10.5% (6% in USD). This was the weakest performance among emerging market countries in three decades, due to the depreciation of the rupee and consistent foreign currency selling. India was also subject to the highest level of punitive tariffs of 50% by the US and a trade deal could be negotiated only by the end of the year,” he said, listing the root causes for Nifty’s underperformance over the past year.
(Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of the Economic Times)
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