FPI net sell $(2.03) Billion in Indian equities in July 2025

6 Aug 2025 , 10:04 AM

FPIS NET SELL $(2.03) BILLION IN JULY 2025

If May and June were the months of positive FPI flows aided by IPOs, the month of July 2025 saw heavy FPI outflows due to tariff uncertainty. As it became increasingly clear that the Indo-US trade deal was not happening, there was a surge in risk-off selling by FPIs. In July 2025, FPIs were net sellers to the tune of $(168) Million in the first fortnight; and net sellers of $(1,859) Million in the second fortnight of the month.

July data points were broadly positive. Inflation touched a 77-month low of 2.1% while GDP growth was healthy, albeit in a lower range. The positive takeaway for July was that the real GDP growth projection for FY26 stayed at 6.5%. However, fear of reciprocal tariffs, lack of progress on Indo-US trade talks, and India’s refusal to budge on agri and GM crops; meant that the Indian export sectors were in for trouble. That triggered heavy FPI selling.

FPI AUC SHARPLY LOWER IN JULY 2025

Between June 2025 and July 2025, FPI equity AUC fell sharply from $867 Billion to $822 Billion. FPI Equity AUC is now -11.7% below the peak of $931 Billion in September 2024. Combined FPI AUC at $899 Billion is well below September 2024 peak of $1.04 Trillion.

Industry Group	FPI AUC (Jul-25) ($ Billion)	FPI AUC (Jun-25) ($ Billion)
Financials (BFSI)	260.07	273.93
Information Technology (IT)	60.63	71.05
Oil & Gas	57.71	63.44
Healthcare and Pharmaceuticals	57.50	57.38
Automobiles and Auto Components	57.29	59.73
Fast Moving Consumer Goods (FMCG)	45.57	44.55
Capital Goods	43.33	46.07
Telecommunications	39.86	43.00
Consumer Services	36.87	36.69
Power (generation and transmission)	27.51	28.90
Metals and Mining	23.20	23.93
Consumer Durables	21.69	22.68
Services	19.57	20.13
Realty	15.85	18.07
Chemicals	15.73	16.04
Cement	14.18	14.35
Construction	14.04	14.94
Top 17 Sectors	810.61	854.88
Other 6 sectors	11.35	12.38
Total FPI AUC	821.96	867.26

Data Source: NSDL

These are the top 17 sectors where FPI AUC is above $10 Billion as of July 2025. Out of the 23 sectors identified by NSDL, AUC of top-17 sectors accounted for 98.6% of total FPI equity AUC of $821.96 Billion. After the sharp fall in AUC in July, it is well below the peak AUC touched in September 2024. What about the key drivers of AUC change in July?

At $260.07 Billion, BFSI dominates AUC. The sectors with highest MOM accretion in AUC were; FMCG (2.3%), Consumer Services (0.5%), and Healthcare (0.2%). Sectors that saw depletion in AUC on MOM basis were IT (-14.7%), Realty (-12.3%), Oil & Gas (-9.0%), Telecom (-7.3%), Construction (-6.0%), and Capital Goods (-6.0%).

IPO FLOWS DRIVE SECTOR ACCRETION IN JULY 2025

In July 2025, FPIs were net sellers worth $(2.03) Billion. Here are the sectoral leaders of FPI flows in July 2025.

FPI Net Buying in Sectors	H1-Jul-25 ($ Million)	H2- Jul-25 ($ Million)	Jul-25 ($ Million)
Miscellaneous Sectors	-2	+931	+929
Services	+318	+83	+401
Metals & Mining	+201	+187	+388
Consumer Services	+111	+236	+347
FMCG Sector	-166	+341	+175
Telecommunications	+33	+136	+169
Chemicals	+20	+110	+130

Data Source: NSDL

There were several sectors with big inflows; although they were not regular heavyweights. If one looks at 3 out of the top 4 sectors in terms of AUC accretion, they were largely driven by FPI IPO flows; either Anchor allocation or QIB flows. Some of the consumer plays like consumer services and FMCG saw strong flows due to their defensive nature and also because they were the best proxies for India consumption.

IT, BFSI, REALTY, AUTOS; SELL OFF IN JULY 2025

Here is a sectoral break-up of FPI net outflows from Indian equities in July 2025.

FPI Net Selling in Sectors	H1-Jul-25 ($ Million)	H2- Jul-25 ($ Million)	Jul-25 ($ Million)
Information Technology (IT)	-638	-1,347	-2,285
Financial Services (BFSI)	+96	-767	-671
Realty	-29	-421	-450
Automobiles	-135	-277	-412
Oil & Gas	105	-477	-372
Consumer Durables	-151	-151	-302
Construction	-4	-150	-154

Data Source: NSDL

The selling theme for FPIs in July 2025 was dominated by IT, which sold off $2.3 Billion post disappointing guidance by large cap IT. Financials, especially banks, saw profit taking after NIMs disappointed, while realty and automobiles saw outflows over pause in rate cuts. Despite gains for OMCs, oil sector saw FPI outflows on account of volatile crude prices.

OUTLOOK FOR FPI FLOWS IN COMING MONTHS

Two factors will determine colour and direction of FPI flows in coming months. Firstly, the punitive tariffs will be negative for export oriented businesses like textiles, jewellery, and chemicals in the short run. However, more than FPI sell-off, it may result in recalibrating demand for India-focused sectors.

Secondly, a lot will depend on response strategy. Will India also impose tariffs on the US or be more pragmatic? How will companies response to export tariffs? Textiles and jewellery companies are looking at routing exports through global centres. Chemicals are re-routed via different ports. These strategies will hold the key to how FPI flows shape up.