Foreign Institutional Investor (FII) ownership in NSE-listed companies declined to 16.71% in September 2025, down from 17.05% in June. The total value of FII holdings fell by Rs 3.38 lakh crore to Rs 74.20 lakh crore, reflecting continued profit booking and a cautious stance amid global market volatility.
Free-Float and Trading Share Decline
The free-float FII share slipped from 34.08% in June to 33.43% in September 2025. Similarly, FIIs’ average share in total market volumes eased slightly to 5.65% from 5.76% in the previous quarter, showing softer foreign participation in daily trading activity.
Number of Active FIIs Falls
The number of FIIs holding over 1% stake in at least one listed firm fell to 326 in September from 346 in March – a 5.8% decline. This indicates reduced activity among large institutional investors, particularly those with concentrated exposure to Indian equities.
Top Foreign Institutional Holders
- Government of Singapore: Rs 1.94 lakh crore across 59 companies (↓16.7% from Rs 2.33 lakh crore, 62 companies)
- Norges Bank: Rs 1.41 lakh crore across 100 companies (broadly unchanged)
- Vanguard: Rs 0.62 lakh crore across 39 companies (↑5.8%)
- Goldman Sachs: Rs 0.51 lakh crore across 57 companies (↑11.2%)
- Capital Group: Rs 0.41 lakh crore across 38 companies (↓46.8%)
Sector-Wise FII Activity
Foreign investors showed mixed trends across sectors. FIIs increased holdings in:
- Consumer Discretionary: 16.15% → 17.36%
- Industrials: 6.95% → 7.13%
Meanwhile, they reduced exposure in:
- Information Technology: 7.96% → 6.69%
- Financials: 31.38% → 30.92%
This shift suggests a move away from overvalued technology stocks towards industrial and consumer-focused sectors benefiting from domestic growth.
Country-Wise FII Breakdown
By total investment value, Singapore-based investors led with 29.14% of total FII holdings, followed by:
- United States: 27.76%
- Norway: 16.70%
However, by number of entities, Mauritius remained on top with 32.72% of the total registered FIIs.
Mutual Funds Narrow Gap with FIIs
The gap between FII and Mutual Fund (MF) ownership continued to narrow. The FII–MF ownership gap reduced to 5.78% in September 2025 – a fall of 71 basis points from the previous quarter. Two years ago, in June 2023, this gap was as high as 10.32%.
Meanwhile, domestic Mutual Fund ownership touched a record 10.93% this quarter, underscoring strong retail and institutional participation in Indian equities despite foreign outflows.
Rising Power of Retail Investors
Individual investors now hold 18.75% of the Indian stock market, the highest level in more than two decades. This marks a major shift in participation, with retail investors increasingly shaping market trends and trading activity.
Total household equity holdings have climbed to Rs 84 lakh crore, reflecting strong momentum in stock ownership. These holdings have grown at a robust 29.8% CAGR over five years and 21.1% CAGR over ten years, underscoring sustained long-term interest from individual investors.
Conclusion
The decline in FII ownership highlights a cautious global sentiment towards emerging markets amid geopolitical uncertainty and shifting monetary policies. However, the consistent rise in domestic institutional investment points to strong underlying confidence in India’s long-term growth story.
[…] 5. Investments (Mutual Funds + Direct Equity) […]