IT Stocks Suffer ₹17,000 Crore Outflows in February, While Capital Goods and Financials Lead Inflows

Foreign Portfolio Investor (FPI) Activity in Indian Stock Market

February 2023 Update

Foreign Portfolio Investors (FPIs) sold Indian Information Technology (IT) stocks worth ₹17,000 crore in February, driven by concerns about potential disruption from artificial intelligence (AI) in the sector. This resulted in a decline of 20% in the Nifty IT index during the month.

FPI Investment Flows

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Despite the sell-off in IT stocks, FPIs remained net buyers of Indian equities, investing a total of ₹22,615 crore in February, according to data from the National Securities Depository Limited (NSDL). The IT sector, however, witnessed the highest selling pressure, with FPI outflows amounting to ₹16,949 crore during the month.

Sector-wise FPI Activity

The IT sector saw sustained selling, with FPIs' total investment declining 21.76% to ₹4,17,719 crore at the end of February, down from ₹5,33,953 crore in January. Other sectors witnessing FPI outflows include:

• Consumer Services: ₹4,172 crore
• Fast Moving Consumer Goods (FMCG): ₹1,951 crore
• Telecommunication: ₹1,881 crore
• Consumer Durables: ₹756 crore

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On the other hand, several sectors witnessed strong FPI inflows, including:

• Capital Goods: ₹12,135 crore
• Financial Services: ₹8,418 crore
• Metals & Mining: ₹5,638 crore
• Oil, Gas & Consumable Fuels: ₹5,381 crore
• Power: ₹4,506 crore
• Construction: ₹4,487 crore
• Automobile and Auto Components: ₹3,586 crore