Active FPI funds selling more of Indian stocks than ETFs
Subscribe to enjoy similar stories. Actively managed foreign funds have sold more Indian stocks than passive funds in the ongoing correction, according to a Mint analysis.
Moreover, sovereign wealth funds and government-owned entities are among overseas investors that have likely purchased domestic stocks, shows the analysis of the data from the National Securities Depository Ltd (NSDL). To be sure, the FPI selling was believed to be driven by passive funds—exchange traded funds or index funds—selling Indian stocks and buying China or Taiwan equities.
Assets under custody (AUC) of foreign portfolio investors have fallen almost 13% from ₹78 trillion at the end of September 2024 to ₹68 trillion as of January 2025, the data shows. However, the total market cap of companies listed on the National Stock Exchange fell 10.5% from ₹470.65 trillion to ₹421.22 trillion during the period, according to exchange data.
The decline in FPI assets exceeds the erosion of NSE market capitalization by 2.5 percentage points, suggesting that actual sale by certain FPIs have also contributed to the decline in the value of their assets, apart from a fall in stock prices. Read more: Manufacturing PMI: Q4 is a litmus test, but no fireworks so far Investment managers and advisors, corporates, pension funds, insurance funds and appropriately regulated funds are among the active foreign portfolio investor (FPI) sub-categories that have sold substantially in this correction, shows the analysis of NSDL data.
An entity is called appropriately regulated if it is regulated in its home jurisdiction. The FPI selling was led by appropriately regulated investment manager as the AUC for the category plunged 37% from ₹1.07 trillion to ₹67,623 crore between
. Read on livemint.com