Financials to Healthcare: Top sectors that saw highest buying by FIIs in March quarter

Foreign Institutional investors who rattled the Indian equity markets in Q2 and Q3 of FY25 by selling relentlessly are now in focus for changing their stance on India. The foreign institutional investors had reduced their holdings in the equity market to multi-decadal lows in February 2025.

According to NSDL data, FII have sold nearly ₹78,000 crore worth of equities in January 2025, followed by ₹34,000 crore in February. However, the selling reduced drastically in March 2025 to ₹3,973 crore. From being net sellers in January, February and March, the FIIs turned into net buyers for April 2025 for the worth of ₹4,223 crore.

The change of stance from being extremely bearish to slightly bullish has aided for strong rally in the Indian markets. The benchmark indices like NIFTY50 and SENSEX have jumped nearly 14% from the recent lows touched in April. Experts believe multiple factors led to a change of stance by the FIIs. These factors include affordable valuation correction from the record highs, rate cuts, tax cuts and resumption of government capex. In addition, India’s economy looks well placed amid the global turmoil of the tariff wars, making it an attractive investment destination for foreigners.

According to Ace Equity data, out of 500 companies from the NIFTY500 index, 204 companies witnessed buying by foreign portfolio investors spanning across different sectors.

Banks

Foreign investors poured strong confidence in India’s banking sector as it showed strong resilience and maintained its balance sheet and asset quality in a healthy state. Out of the NIFTY 500 companies, almost all small, medium and large banks saw FPI buying. Major Banks such as IndusInd Bank, RBL Bank, Bank of India, Bank of Maharashtra and IDBI Bank witnessed more than a 10% increase in the FPI holding in the March 2025 quarter. Apart from these, many banks such as Central Bank of India, UCO Bank, and Indian Overseas Bank witnessed FPI shareholding increase above 1% from below 0% in the previous quarter.

Finance

Followed by Banks, all major financial institutions, including non-banking financial institutions, stock exchanges, power finance companies, brokers, credit card companies and asset management companies, all witnessed significant interest from foreign investors. Companies like Aptus Value Housing Finance, Sanman Capital, Poonawala Fincorp, Credit Access Grameen and SBFC Finance witnessed more than a 25% increase in the FPI shareholding in the Q4FY25 as compared to Q3FY25. Apart from above mentioned financial institutions, 30 other companies witnessed buying interest from foreign investors.

Chemicals

Chemicals is the third sector that witnessed strong interest from foreign investors during the March quarter. Companies like Coromandel International, Chambal Fertiliser and Chemicals, Navin Fluorine International and The Fertilisers and Chemical Travancore all witnessed more than a 10% increase in the FII holding in the March quarter. The chemical sector has seen renewed interest from institutional investors as sectoral tailwinds like price rationalisation, strong domestic and export demand, have buoyed the investor sentiment for the sector.

Auto Ancillary

After Chemicals, Automobile companies like Hyundai Motor India, Ola Electric Mobility, and TVS Motors witnessed major optimism as the FPI shareholding for the respective companies increased in the March 2025 quarter, as budget changes in taxes are expected to benefit automobile demand. Ola Electric Mobility witnessed a 37% increase in the FPI shareholding from 2.1% to 2.8% in Q4FY25. Similarly, auto ancillary companies like Castrol India, Endurance Technologies, UNO Minda, and Balkrishna Industries also witnessed increased buying interest during the quarter.

Pharmaceuticals and Healthcare

Shares of leading healthcare and pharmaceutical companies like JB Chemicals & Pharmaceuticals, Gland Pharma, and Vijaya Diagnostics were the top three companies that saw a more than 10% jump in the FPI holding in the March 2025 quarter compared to the subsequent quarter. Apart from the above companies, other leading life science, pharmaceutical API and diagnostics companies also saw buying interest from the foreign investors during the quarter.