IT Stocks See Sharpest Monthly FPI Outflows In Nearly Three Years Amid Weak Outlook

Indian IT sector saw highest foreign portfolio investment outflows in nearly three years in April after major software firms reported disappointing earnings and muted outlook.

The foreign portfolio investors sold $1.8 billion from Indian information technology stocks last month, marking the sector’s largest monthly outflow since May 2022, when overseas funds withdrew $2.1 billion, according to details compiled by NDTV Profit from the data available on National Securities Depository Ltd.

The exit came as the NSE Nifty IT Index fell 3% last month, led by a 10% drop in Coforge Ltd. and an 8% slide in Wipro Ltd. shares. The pullback followed subdued earnings by some of the major technology firms for the quarter ended March and muted forecasts for the ongoing financial year, as the companies flagged pressure from slowing global tech spending, economic uncertainty, and tightening immigration policies in the US after Donald Trump assumed the presidency.

Weak guidance typically signals slower deal conversions, budget tightening by clients, and delays in discretionary projects. The added layer of policy uncertainty—especially around visas and offshore hiring—further complicates operations for firms that rely on deploying talent overseas. When global funds cut exposure to tech, it can influence pricing, hiring, and capital allocation decisions across the industry.

Despite the selloff in IT, foreign portfolio investors were net buyers of Indian equities last month, pumping in $528 million in April—their first monthly inflow of 2025, according to NSDL data. However, the IT sector recorded the sharpest outflows among all sectors.

After IT, the automobile and auto components sector saw net withdrawals of $375 million, followed by the metals and mining stocks with $398 million in FPI outflows, NSDL data showed.

In contrast, financial services stocks led sector-wise inflows, attracting nearly $2.2 billion in April, according to NSDL data. The sector had initially seen outflows of $525 million from April 1 to 15, before reversing with strong inflows of $2.7 billion in the second half of the month.

Telecommunication stocks recorded the second-highest monthly FPI inflow with $544 million, followed by the fast moving consumer goods sector, which saw $343 million.