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FIIs Trim Nifty-500 Holdings, Bet Big on Selective Sectors
16 Aug
Summary
- FII ownership in Nifty-500 at multi-year lows in June 2025
- FIIs increase holdings in infrastructure, telecom, and chemicals
- Domestic investors steadily increase presence in Nifty-500
As of August 16, 2025, foreign institutional investor (FII) ownership in Nifty-500 companies stood at 18.8%, close to its multi-year lows. This suggests a continued retreat of foreign capital from Indian equities. However, a closer look at sector-level data reveals a more nuanced story.
While FIIs have been cutting holdings across the broader Nifty-500 universe, they have selectively increased their stakes in specific sectors. For instance, FIIs have sharply raised their positions in infrastructure (+520 basis points), NBFC non-lending (+470 bps), telecom (+220 bps), media (+140 bps), electronics manufacturing services (+120 bps), and chemicals (+80 bps) as of the June 2025 quarter.
This selective approach is also evident at the stock level. In large-caps, FII holdings have remained almost unchanged year-over-year. Within the Nifty-50 index, FIIs have increased stakes in companies like Bharti Airtel, Wipro, HDFC Bank, and Bharat Electronics, even as they trimmed holdings in other index heavyweights.
The shift in FII sectoral allocation suggests they are aligning their portfolios with specific structural themes, such as the government's capital expenditure push, the telecom sector's growth prospects, and India's push for self-reliance in manufacturing. Meanwhile, domestic institutional investors have steadily increased their presence, with their holdings in the Nifty-500 climbing to a record 19.4%.
