The outflow came after FPIs turned net buyers in October, snapping a three-month selling streak. Yet, in a striking display of selective buying, FPIs channelled ₹14,326 crore into telecom stocks alone—their strongest monthly inflow since April 2022, according to the latest data from National Securities Depository Ltd (NSDL).
This performance made telecommunications the top-gaining sector in November, even as key segments such as realty and information technology (IT) saw FPI outflows. In October, when overseas investors poured ₹14,610 crore into equities, telecom attracted inflows of ₹2,160 crore. The sector has drawn net inflows of ₹47,988 crore so far in 2025, sharply higher than ₹23,737 crore in 2024 and ₹5,529 crore in 2023.
The oil and gas sector has been the next major beneficiary of this cautious shift. The sector attracted ₹7,169 crore in November, while cumulative net inflows for 2025 stand at ₹6,075 crore. “The shift towards telecom and oil and gas has more to do with earnings recovery and the sustainability of profits rather than a structural change in investor preference,” said Anand K. Rathi, co-founder of Mira Money.
Other selective bets
Overseas investors have shown selective interest in a few cyclical and industrial sectors in 2025. Services attracted ₹11,349 crore of inflows—the highest in two years—though November saw a modest outflow of ₹980 crore, highlighting near-term caution.
Capital goods recorded inflows of ₹2,495 crore in November, though the sector remains flat for the year with a marginal ₹15 crore outflow. Chemicals and petrochemicals have shown early signs of revival, attracting ₹6,065 crore in 2025, their best showing since 2023, following earnings stabilization and valuation corrections.
Metals and mining have also seen net inflows of ₹1,677 crore, reversing outflows over the past two years, though November again saw selling of ₹680 crore amid global commodity volatility.
Fallen out of favour
Amid this renewed interest, IT has borne the brunt of FPI selling in 2025. The sector has seen net outflows of ₹29,425 crore, reversing the ₹3,151 crore of inflows recorded in 2024. The pressure intensified in November, when IT services saw the largest monthly outflow of ₹5,794 crore. According to Rathi: “Rising concerns over artificial intelligence and its implications for the IT sector have been a key driver behind the recent pullback from IT stocks.”
Consumption-linked sectors have also fallen out of favour. Food, beverages, and tobacco have seen net outflows of ₹30,942 crore in 2025—the steepest since 2022—and an outflow of ₹4,764 crore in November. Consumer services and consumer durables have recorded outflows of ₹19,864 crore and ₹21,968 crore, respectively, with both sectors seeing further sales in November.
However, analysts caution against reading this as a long-term shift away from consumption. “Flows into consumption can turn quickly once investors see signs that demand is stabilizing,” Rathi said. “What we are seeing now is a move away from traditional FMCG, which remains expensive, towards premiumization and upscaling—such as consumer durables and discretionary categories.”
Other cyclical sectors also remain under pressure. Power stocks have seen net outflows of ₹23,769 crore in 2025, their highest since 2023, while healthcare services recorded exits of ₹21,973 crore after three years of strong inflows. Realty has seen ₹11,694 crore of outflows, automobiles and auto components saw outflows of ₹9,853 crore, and construction and financial services saw cumulative outflows of over ₹1 trillion in the year so far.
Anchal Kansal, senior advisory manager at Sebi-registered investment management firm Green Portfolio stressed that the shift does not signal a loss of faith in the country’s long-term growth story. “FPIs are gravitating towards sectors aligned with domestic demand, government policy priorities, and predictable cash flows. At the same time, segments that rely heavily on global corporate spending—such as export-led IT and parts of consumption—are facing a temporary slowdown, marked by weaker earnings momentum and cautious FY26-27 guidance,” she said.
As a result, the current rotation appears cyclical rather than structural, driven by near-term global pressures and sector-specific earnings visibility, rather than any fundamental reassessment of India’s growth prospects or market leadership.
