Foreign Portfolio Investors (FPI) sold a huge selling of Rs 34,993 crore (about $ 4 billion) from the Indian stock market in August. This was the largest withdrawal in the last six months. This is the first time since February, when such a large amount of money has gone out of the market. Earlier in February, FPI sold shares worth Rs 34,574 crore.
This withdrawal was almost doubled compared to July, when an outflow of Rs 17,741 crore was recorded. In this way, in 2025, the total FPI withdrawal from Indian equity has reached a level of Rs 1.3 lakh crore.
What causing FPI selling?
Experts believe that both global and domestic factor are responsible for the current selling. Himanshu Srivastava, Associate Director, Morningstar Investments, said Himanshu Srivastava said US President Donald Trump has imposed a 50% tariff on Indian exports. This has shocked the assumption of investors.
He said that due to heavy tariffs, the possibility of India’s business competition and growth outlook increased. Also, in the June quarter, corporate earnings of some major sectors were weaker than expected, which reduced the hunger and reduced investors.
Expensive valuation is also a big reason
VK Vijaykumar, the Chief Investment Strategist of Geojit Investments, says that the major reason for this massive FPI selling is a high valuation in India. At the same time, valuations in other markets are relatively cheap. For this reason, investors are shifting capital there.
However, he also stated that FPI has been a buyers in the primary market for a long time. Despite heavy selling through exchanges this year, he has bought equity of Rs 40,305 crore in the primary market, where the valuation of the IPO was somewhat attractive.
Stir in date market too
The FPI also changed a partial stand in the date market in August amidst evacuation from equity. He invested Rs 6,766 crore in the Date General Limit during this period, while the date volunteer withdraws Rs 872 crore from the retention route.
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