The overseas investor selloff hit ₹1.6 lakh crore in the ongoing Samvat year, turning into a major factor behind the subdued stock market performance of the Indian stock market in a year.
Foreign portfolio investors (FPIs) have remained net sellers of stocks in seven of the last 11 months, according to NSDL data. However, the tide seems to be turning this month, with ₹653 crore in October”>FPI net inflows at ₹653 crore in October so far after three months of relentless selling.
Against this backdrop, the NSE benchmark index Nifty 50 has remained flat in the last one year, significantly underperforming other asset classes like gold and bitcoin.
The lack of lucrative valuations and earnings slowdown have made the smart money dump Indian stocks to seek opportunities elsewhere.
“From 2024 Samvat till September 2025, foreign investors have offloaded Indian equities, largely driven by high valuations and attractive opportunities in other markets. With the market trading at a PE of around 22 and earnings growth slowing, FIIs are reallocating capital to regions offering better returns,” opined Trivesh D, COO Tradejini.
They have also been steadily buying and investing through the primary market, highlighting their intent to invest in more reasonably valued names. The total FII buying through the primary market in 2025 so far stands at ₹46,164 crore.
India has been hugely underperforming other markets like China, Hong Kong, Taiwan, South Korea and Brazil by a wide margin this year. FPIs benefited by moving money from expensive India to other relatively inexpensive markets, opined Dr V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.
However, with the intensity of FII selling declining, analysts believe Samvat 2082 might spell a different story, led by a revival in earnings.
Can FPI selloff trend reverse in Samvat 2082?
With earnings bottoming and valuations turning more reasonable, we expect that FII flows are likely to revive, opined Nandish Shah, AVP– PCG Research & Advisory, (Fundamental) Wealth Management, Motilal Oswal Financial Services.
With FY26 earnings likely to post mid-single growth (~ ₹1,096 EPS), valuations have now normalised, with one-year forward P/E at ~20.6x, near its long-period average.
Trivesh D sees this trend as likely to continue in the short term until there are distinctly visible domestic growth signs that might include policy reforms that facilitate business expansion, stronger corporate earnings, and a global economic environment that is stable. Eventually, once these issues register steady progress, foreign investors are likely to return, he opined.
The analyst added that India has remained in a consolidation phase since May 2025, while the global rally has been seen as heavily AI-driven. “Once this momentum cools, foreign capital is likely to look for alternative opportunities and India’s long-term structural growth story remains intact, positioning it to attract significant flows over time,” he added.
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
