Top 5 sectors that attracted FII buying in March quarter

Foreign Institutional Investors (FIIs) are back on Dalal Street, reversing their bearish stance from earlier quarters. Out of the 500 companies in the NIFTY500 index, 204 saw an increase in foreign shareholding in Q4 FY25, signaling renewed investor confidence in India’s growth story.

After aggressive selling in the first three months of 2025, FIIs turned net buyers in April, pumping in ₹4,223 crore, a sharp turnaround from ₹1,16,574 crore of outflows in the January–March period. Experts believe this shift could continue, with Indian equities offering better value compared to Asian peers.

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FIIs slashed their holdings to multi-decade lows by February 2025, offloading ₹78,000 crore in January and ₹34,000 crore in February. March selling eased to ₹3,973 crore, paving the way for April’s net inflow. This reversal fueled a market rally, with NIFTY50 and SENSEX rebounding 14% from April lows.

Analysts attribute the FII turnaround to improved valuations, prospects of rate and tax cuts, and the government’s renewed capital expenditure push. India’s relative economic stability amid global trade tensions also makes it an appealing destination for foreign capital.

Top 5 Sectors That Attracted FII Buying

Banking

Foreign investors showed strong confidence in Indian banks, impressed by their solid balance sheets and healthy asset quality. Key names like IndusInd Bank, RBL Bank, Bank of India, Bank of Maharashtra, and IDBI Bank saw over 10% growth in FPI holdings. Even public sector banks like Central Bank of India, UCO Bank, and Indian Overseas Bank recorded an uptick in foreign shareholding from negligible levels.

Finance

Non-banking financial firms, stock exchanges, credit companies, and brokers all drew FII interest. Standout gainers included Aptus Value Housing Finance, Sanman Capital, Poonawalla Fincorp, CreditAccess Grameen, and SBFC Finance—each posting over 25% rise in foreign ownership. In total, 30 financial firms saw increased foreign investment.

Chemicals

The chemicals sector attracted foreign investors amid rising domestic and export demand. Coromandel International, Chambal Fertilisers, Navin Fluorine, and Fertilisers and Chemicals Travancore reported more than 10% growth in FII holdings in Q4 FY25.

Auto Ancillaries

Automobile and related companies also caught FII attention, buoyed by tax cuts expected to drive demand. Ola Electric Mobility’s FPI shareholding rose from 2.1% to 2.8% (a 37% increase). Auto ancillary firms like Castrol India, Endurance Technologies, UNO Minda, and Balkrishna Industries also logged foreign buying.

Pharmaceuticals & Healthcare

Pharma and healthcare firms rounded out the top sectors. JB Chemicals & Pharmaceuticals, Gland Pharma, and Vijaya Diagnostics saw over 10% growth in FPI holdings. Several other pharmaceutical, life sciences, and diagnostics players also benefited from increased foreign investor interest.

With FIIs returning to Indian equities, experts anticipate this buying spree could extend into the coming quarters, riding on India’s favorable economic backdrop and policy support.