FIIs Continue to Invest in Indian Primary Market Despite Selling
Foreign institutional investors (FIIs) are still participating in the Indian primary market. This indicates ongoing investment in new themes and businesses. This is occurring despite them being net sellers for most of 2025. According to Vipul Bhowar, Senior Director, Head of Equities, Waterfield Advisors, “When we examine the data for secondary market inflows, we gain a better understanding.” The same clarity is noticeable in primary market inflows.” FIIs are still participating in the primary market.
Key Highlights
- FII Outflows: Foreign investors offloaded Indian equities worth nearly Rs 21,000 crore in the first half of August. This sale took the total outflow to Rs 1.16 trillion in 2025.
- Reasons for Outflows: Market watchers attribute the outflows to US tariff concerns, weak Q1 corporate earnings, and rupee depreciation.
- Domestic Investors: Domestic institutional investors.
- S&P Global’s Rating Action: S&P Global raised India’s long-term sovereign credit rating to BBB from BBB- in August 2025. They cited credible fiscal consolidation. The strong external position and well-anchored inflationary expectations were also noted.
Outlook
The FII selling appears to be abating after S&P Global’s rating action, which projects India’s real GDP growth at 6.5%. The rating agency also predicts that US tariffs will have a marginal impact on Indian exports, given the sectoral exemptions on pharmaceuticals and consumer electronics
