FPIs Withdraw ₹14,185 Crore From Equities In December; ₹915 Crore Flows Into Debt

Foreign portfolio investors (FPIs) continued to reduce exposure to Indian equities in December 2025, recording a net outflow of ₹14,185 crore on a month-to-date basis. Depositories data also revealed ₹915 crore of inflows under debt general limits, indicating selective participation in fixed-income instruments despite equity weakness.

This trend follows November’s net equity outflow of ₹3,765 crore after October’s ₹14,610 crore inflow, which briefly interrupted a selling streak. Between July and September, FPIs cumulatively sold over ₹76,000 crore worth of equities, reflecting sustained risk-off sentiment before October’s temporary reversal.

Monthly Flow Trend: July To December 2025

FPIs offloaded ₹17,700 crore in July, ₹34,990 crore in August, and ₹23,885 crore in September, according to depositories data. October marked a reversal with ₹14,610 crore inflows, but November saw renewed selling of ₹3,765 crore.

In December, outflows moderated from mid-month levels of ₹17,955 crore to ₹14,185 crore by December 21, indicating partial recovery in later sessions. This fluctuation highlights the volatility in foreign flows amid global and domestic uncertainties.

Equity Versus Debt: Divergent Positions

Despite sustained equity withdrawals, FPIs invested ₹915 crore in debt under RBI’s general limits framework. The category allows non-resident participation in corporate debt, with norms eased in May 2025 by removing short-term and concentration caps.

Debt investment caps remain guided by RBI circulars for FY 2025–26, ensuring compliance with regulatory thresholds. This divergence suggests FPIs are reducing equity risk while maintaining exposure to rupee-denominated debt instruments, reflecting a cautious yet diversified approach.

Drivers Of December Flows

Analysts attribute December’s equity selling to rupee weakness, elevated domestic valuations, and global risk-off sentiment amid higher overseas yields. Year-end portfolio rebalancing and policy uncertainty added pressure on foreign flows.

While heavy selling dominated early December, later sessions saw offsetting inflows that trimmed the net outflow tally. Domestic institutional investors absorbed part of the selling, cushioning market volatility and limiting sharp price corrections.

Read More: SEBI Introduced SWAGAT-FI for FPI’s and FVCI’s Entry into Indian Market.

Conclusion

As of December 22, FPIs remain net sellers of equities, withdrawing ₹14,185 crore, while deploying ₹915 crore into debt. The month’s trajectory included heavier mid-December outflows followed by partial moderation, reflecting changing global and currency conditions.

November’s net outflow and October’s inflow set the backdrop for December’s mixed signals, with domestic participation playing a stabilising role. The year’s pattern shows alternating phases of foreign selling and buying, shaped by macroeconomic conditions and currency dynamics.

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