Foreign investor holding in equity slips to 15-year low; nearly Rs 2 lakh crore sell-off in 2025: NSE report

Foreign institutional and portfolio investors have significantly reduced their Indian equity holdings, with NSE-listed stocks reaching a 15-year low after a substantial sell-off of nearly Rs 2 lakh crore in 2025, according to NSE data.The September quarter witnessed significant decline in FPI ownership of Nifty 50 and Nifty 500 companies, dropping 43 and 46 basis points respectively to 13-year lows of 24.1% and 18%, indicating widespread selling across market segments.FPI holdings have consistently decreased since March 2023, showing unstable foreign capital flows. The first half of FY26 saw FPI share in NSE-listed companies fall 63 bps to 16.9%, the lowest in over 15 years. This reduction resulted from net FPI outflows of $8.7 billion during the quarter. FPI holdings value in NSE-listed companies decreased 5.1% quarter-on-quarter to Rs 75.2 lakh crore as of September 30, 2025, despite maintaining 17% annualised growth over two decades, according to the NSE data analysis cited by Economic Times.FPIs remained heavily invested in financials whilst increasing their communication services exposure. They displayed caution towards consumption and commodity-related sectors, maintaining reduced positions in consumer staples, energy, and materials. Their stance remained negative on industrials, with a slightly pessimistic outlook on information technology. They maintained neutral positions on consumer discretionary—slightly positive following recent GST changes—healthcare, utilities, and real estate.Domestic mutual funds achieved new ownership records across market segments in September, marking nine consecutive quarters of peak ownership, backed by steady equity inflows. DMFs invested Rs 1.64 lakh crore in Q2FY26, their 18th consecutive quarter of positive flows, increasing their ownership to 13.5% in Nifty 50, 11.4% in Nifty 500, and 10.9% in NSE-listed companies. This led domestic institutional investors to achieve 18.7% ownership in NSE-listed firms, exceeding FPI ownership for four straight quarters.Individual investors maintained stable ownership in NSE-listed companies, ranging between 9.5% and 9.8% over nine quarters, settling at 9.6% in September 2025. This stability was supported by renewed retail investor inflows of Rs 20,469 crore. Notably, excluding the top 10% companies by market capitalisation, individual investor ownership increased 48 bps to a 19-year high of 16.7%, showing increased interest in mid and small-cap stocks.