FPIs continue to invest; inject ₹14,167 cr. in equities in May
Foreign investors continue to show confidence in the country's equity market, infusing ₹14,167 crore so far this month, largely driven by favourable global cues and robust domestic fundamentals.
Notably, this inflow has come despite the ongoing military tensions between India and Pakistan.
India-Pakistan ceasefire LIVE: Follow the updates on May 11, 2025
This positive momentum follows a net investment of ₹4,223 crore in April, marking the first inflow after three months, data with the depositories showed.
Prior to this, foreign portfolio investors (FPIs) had pulled out ₹3,973 crore in March, ₹34,574 crore in February, and a substantial ₹78,027 crore in January.
'Going ahead, global macros (declining dollar, slowing U.S. and Chinese economy) and domestic macros (high GDP growth and declining inflation and interest rates) will facilitate increasing FPI inflow into the Indian equity,' V.K. Vijayakumar, Chief Investment Strategist, Geojit Investments, said.
However, debt inflows are likely to remain very low, he added.
According to the data from the depositories, FPIs made a net investment of ₹14,167 crore in equities in this month (till May 9). The latest flow has helped narrow the outflow to ₹98,184 crore in 2025 so far.
India's equity markets witnessed a sharp resurgence in FPI activity in April, signalling a marked reversal from the outflow seen earlier this year. The momentum continued in May, too.
'This renewed momentum was underpinned by a blend of favourable global cues and robust domestic fundamentals that bolstered investor confidence,' Himanshu Srivastava, Associate Director - Manager Research, Morningstar Investment, said.
One of the key catalysts behind this trend has been the improving outlook for a potential U.S.-India trade agreement. Additionally, the weakening of the U.S. dollar, alongside a strengthening Indian rupee, enhanced the appeal of Indian assets to global investors, he said.
'Furthermore, upbeat quarterly earnings from prominent Indian corporates added to the positive sentiment,' he added.
'The hallmark of FPI investment in recent days has been the sustained buying by them. They bought equity through the exchanges consecutively for 16 trading days ended on May 8 for a cumulative amount of ₹48,533 crore. They sold for ₹3,798 crore on May 9 when the India-Pak conflict got escalated,' Geojit Investments' Mr. Vijayakumar said.
On the other hand, FPIs took out ₹3,725 crore from the debt general limit and invested ₹1,160 crore in the debt voluntary retention route during the period under review.
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