The exit behind the entry: IPO afterglow masks a vanishing act, shows data

Behind listing glitter lies a hushed but heavy retreat of overseas money

Foreign portfolio investors (FPIs) have taken a two-track approach this year: pulling money from listed equities while quietly investing in initial public offerings (IPOs) and other primary market deals like rights issues and qualified institutional placements. This has blurred the true extent of their selling in domestic markets so far. 

On paper, FPIs have sold a net ₹84,027 crore (around $10 billion) in 2025. But nearly ₹34,664 crore ($4 billion) of that has gone into primary market offerings, according to data from the National Securities Depository. 

Strip that out, and FPIs have actually offloaded close to ₹1.2 trillion ($14 billion) worth of listed shares, making it one of the sharpest pullbacks across emerging markets (EMs) this year.

 

This heavy selling has weighed on Indian equities. The benchmark Nifty index is up just 4.6 per cent in 2025, while the MSCI EM index has climbed nearly 17 per cent. Since the rebound began in April, India’s performance — while seemingly resilient — has trailed most global peers, even as capital has shifted towards non-dollar assets. 

Analysts point to high valuations and slower earnings growth as key drags. Nifty earnings are expected to rise 12 per cent this financial year (2025-26), roughly in line with other EMs that offer better value. 

Some say the damage would’ve been worse without steady liquidity support from domestic investors. Mutual funds have infused ₹2.65 trillion into equities this year, cushioning the blow from foreign selloff.