FII exposure in Nifty stocks retreats from peak after Rs 1.6 lakh crore exodus in 2025. Where’s money flowing?

Foreign institutional investors have reduced exposure to Nifty 50 stocks, with holdings dropping to 25.5% by December 2025 amid global risk aversion. However, FIIs are selectively increasing positions in mid and smallcaps. Meanwhile, rising DII ownership continues to reshape market structure, offsetting promoter dilution and adding stability to Indian equities.