Foreign Investors Consolidate Power in Financials; Realty and Energy Sectors Quietly Attract Alternative Bets
By Shishta Dutta | Updated at: Oct 13, 2025 05:35 PM IST
Mumbai, 4 July 2025: Foreign Portfolio Investors (FPIs) are maintaining a firm grip on India’s financial markets, with their exposure to Financial Services reaching ₹21.37 lakh crore in equity assets under custody (AUC) as of 30 June 2025, according to the latest sector-wise data released by NSDL.
While finance leads the pack, sectors like real estate and power are drawing increasing interest through structured and debt-based instruments, suggesting a strategic pivot in investment approach.
Financial Services Anchor Over One-Third of All FPI Equity Investments
FPIs’ equity investments now total ₹71.52 lakh crore, which accounts for more than 91% of the combined ₹78.11 lakh crore parked across equity, debt, mutual funds, and AIFs. Of this, Financial Services alone accounts for ₹21.37 lakh crore or 29.88%—a reflection of foreign investors’ strong preference for the sector as a reliable avenue for capital deployment and returns.
Top 5 Sectors by FPI Equity AUC (as on June 30, 2025)
| Rank | Sector | Equity AUC (₹ Cr) | % Share in Equity AUC |
|---|---|---|---|
| 1 | Financial Services | 21,37,234 | 29.88% |
| 2 | Information Technology | 5,99,627 | 8.38% |
| 3 | Oil, Gas & Consumable Fuels | 5,15,705 | 7.21% |
| 4 | Automobile & Auto Components | 4,90,153 | 6.86% |
| 5 | Healthcare | 4,85,293 | 6.79% |
Diversification Gains Ground: Realty and Power Attract Debt and Hybrid Interest
While equity investments remain dominant, FPIs are increasingly leveraging hybrid and debt-focused channels to tap into capital-intensive sectors like real estate and power. This shift points to evolving investment strategies aligned with India’s infrastructure expansion and policy-driven transformation.
- Real Estate: Registered ₹24,329 crore under Debt-FAR and ₹1,033 crore under General Debt. Equity AUC stood at ₹1.56 lakh crore, pushing total AUC to ₹1.83 lakh crore.
- Power: Gained ₹5,637 crore via Debt-FAR and ₹3,477 crore in General Debt. Its total AUC reached ₹2.52 lakh crore, underscoring rising investor confidence in energy infrastructure.
Sample of FPI Investment Diversification (as on June 30, 2025)
| Sector | Equity (₹ Cr) | Debt-FAR (₹ Cr) | AIF/Other (₹ Cr) | Total AUC (₹ Cr) |
|---|---|---|---|---|
| Realty | 1,56,167 | 24,329 | 1,033 | 1,82,508 |
| Power | 2,43,253 | 5,637 | 3,477 | 2,52,367 |
| Telecom | 3,33,911 | 12,096 | 7,900 | 3,54,028 |
Currency Stability Adds Clarity to Investment Benchmarks
To ensure consistent cross-period comparisons in dollar terms, NSDL applied RBI’s end-of-period reference rates:
- June 15, 2025: ₹86.0979/USD
- June 30, 2025: ₹85.5439/USD
This standardisation aids FPIs in aligning with global reporting frameworks and measuring returns with greater accuracy.
Structured Debt Instruments Draw Foreign Interest Beyond Mainstream Sectors
FPIs are also targeting niche issuers in the debt segment through customised credit instruments. PortEast Investment Pvt Ltd led the ‘Others’ debt category with ₹22,964 crore in AUC as of 15 June 2025. Other prominent entities include Reliance Logistics, Fullerton India Credit, NABARD, and SIDBI—collectively representing ₹42,723 crore in this segment. These figures highlight a growing preference for private lending and structured credit strategies.
Report Methodology and Classification: Transparent and Comprehensive
The NSDL’s fortnightly update encompasses investments across equity, mutual funds, AIFs, and all categories of debt, including General, VRR, and Debt-FAR. Since 31 August 2024, AIFs and mutual fund assets have been fully integrated into the reporting model, providing a clearer picture of foreign capital deployment.
Sectoral data is organised as per the BSE–NSE Common Industry Classification, introduced on 30 April 2022, ensuring uniformity across market disclosures and exchange platforms.
Investor Strategy Shifts: Core Bets in Finance, Strategic Moves in Infra and Credit Sectors
While Financial Services and IT continue to attract bulk equity allocations, foreign investors are recalibrating their strategies to include emerging segments like power, real estate, and private credit. This dual-track approach signals long-term confidence in India’s growth fundamentals, anchored in financial stability and bolstered by infrastructure development.
REF: https://www.fpi.nsdl.co.in/web/StaticReports/Fortnightly_Sector_wise_FII_Investment_Data/FIIInvestSector_June302025.html
Disclaimer: At HDFC SKY, we take utmost care and due diligence in curating and presenting news and market-related content. However, inadvertent errors or omissions may occasionally occur.
If you have any concerns, questions, or wish to point out any discrepancies in our content, please feel free to write to us at content@hdfcsec.com.
Please note that the information shared is intended solely for informational purposes and does not make any investment recommendations
