In a significant shift in market sentiment, Foreign Institutional Investors (FIIs) staged a strong comeback in October 2025, emerging as net buyers in the Indian equity markets after three consecutive months of net selling. This bullish trend was complemented by robust investment from Domestic Institutional Investors (DIIs), creating a powerful dual engine that propelled the benchmark indices to substantial gains.
A Month of Robust Institutional Buying
Foreign Institutional Investors purchased Indian shares worth a substantial ₹11,050 crore, which is approximately $1.3 billion, during the month of October. This marked a decisive reversal from their previous selling pattern. According to a detailed report by JM Financial, FIIs remained net buyers for the majority of the trading sessions in October, with only sporadic selling activity observed towards the month's end.
Domestic Institutional Investors mirrored this optimistic stance, demonstrating even greater conviction by investing a massive $6 billion in Indian equities during the same period. This combined institutional confidence provided a strong foundation for the market's performance.
The result of this heavy buying was clearly reflected in the market indices. The benchmark NSE Nifty 50 index gained an impressive 4.5% in October 2025, a significant acceleration from the modest 0.75% increase recorded in the previous month of September.
Sectoral Trends: Where FIIs Placed Their Bets
The sectoral allocation of FII investments revealed clear preferences. The Banking and Financial Services (BFSI) sector emerged as the undisputed champion, attracting the highest FII inflows at $1,501 million. It was followed by the Oil & Gas sector, which pulled in $1,030 million.
Other sectors that witnessed notable FII interest included Metals ($355 million), Telecom ($243 million), Automobile ($110 million), and Power ($109 million).
On the flip side, several sectors experienced net outflows as FIIs reshuffled their portfolios. The Fast-Moving Consumer Goods (FMCG) sector saw the highest outflows at $482 million. It was followed by the Services sector ($391 million), Pharma ($351 million), Information Technology ($248 million), Consumer Durables ($198 million), and Chemicals ($105 million).
Portfolio Composition and Market Share
Despite these inflows and outflows, FIIs' top five sectoral holdings remained unchanged. These core sectors—BFSI, Auto, IT, Oil & Gas, and Pharma—collectively account for nearly 60% of all FII assets invested in India.
On a sequential basis, FII exposure increased in the BFSI and IT sectors, while the Auto and Oil & Gas sectors saw a marginal decline. Holdings in the Pharma sector remained stable.
As a share of the total FII Assets Under Custody (AUC) in India, BFSI continued its dominance, rising to 31.7% from 31.2% in September 2025. The other leading sectors in the portfolio were Auto at 7.7% (down from 8%), IT Services at 7% (up from 6.9%), Oil & Gas at 6.9% (down from 7%), and Pharma, which held steady at 6.7%.
In a broader context, the overall FII shareholding in Indian equities stood at 15.4% as of October 2025, slightly lower than the 15.6% recorded in September. However, the total equity AUC managed by FIIs in India saw a healthy 2.7% month-on-month increase, reaching ₹72.7 lakh crore in October, up from ₹70.8 lakh crore in the previous month.
