A major source of income for India’s software exporters, the demand for large-scale, human-led coding and IT support services may decline due to rapid advancements in generative artificial intelligence. This is why foreign institutional investors (FIIs) sold over Rs 10,956 crore worth of information technology stocks in the first half of February.
Due to this selloff, FIIs’ total investment in IT stocks fell 16 percent from Rs 5.34 lakh crore at the end of January 2026 to Rs 4.49 lakh crore as of February 15, the lowest level in four years, according to NSDL data.
FIIs have been selling IT stocks nonstop since the beginning of 2025, selling close to Rs 74,698 crore in total during that time. It is anticipated that the March quarter shareholding trends will include details on stock-by-stock stake decreases.
In early 2025, FII’s holdings of IT stocks reached a record high of over Rs 7.3 lakh crore. Their holdings are now worth 38 percent less due to the recent drop in stock prices and ongoing selling. As of February 13, mutual funds’ total investment in the top 10 IT equities was worth Rs 3.04 lakh crore, down from Rs 3.56 lakh crore at the end of January 2026. This represents a notional loss of more than Rs 50,000 crore.
FIIs continued to purchase stocks in several other industries while selling IT stocks. Following purchases of Rs 2,761 crore in January, capital goods stocks saw purchases totaling Rs 8,032 crore in the first half of February. FIIs also made purchases in other industries, including construction, mining, metallurgy, and electricity. After purchasing more than Rs 11,526 crore in January, metals and mining reported purchases of Rs 3,279 crore in the first half.
FIIs were net sellers of FMCG and healthcare stocks in addition to IT. In the first half of February, they made sales of Rs 1,051 crore in healthcare and Rs 1,182 crore in FMCG. FIIs sold Rs 6,162 crore in the healthcare industry and Rs 7,497 crore in the FMCG sector in January.
