Retailers mostly buy or sell for a movement of 200-300 pts in Nifty while FIIs Hedge for a trend or an event, if you take current scenario Nifty had gained nearly 1000 pts from its recent low's of 18800, around that time FIIs positions in derivatives were longs 10% while shorts 90% as of yesterday they are longs 20%, shorts 80% which means they are yet to cover their shorts. As per my assumptions they are waiting for the results of state assembly election which is due on Dec 03rd 2023, so this is event based hedging, so if market reacted positively to election results there may be heavy short covering.
As FIIs play a major role in open interest its better to follow their activity.