FPIs invest ₹18,620 crore in May on global cues, domestic strength

Business Standard

18-05-2025

Foreign investors continue to show confidence in the country's equity market, infusing ₹18,620 crore so far this month, driven by a combination of global tailwinds and improving domestic fundamentals.
This positive momentum follows a net investment of ₹4,223 crore in April, marking the first inflow in 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 Rs 78,027 crore in January.
FPIs are likely to continue their buying interest in India, and therefore, large caps will be resilient, VK Vijayakumar, Chief Investment Strategist, Geojit Investments, said.
According to the data from the depositories, foreign portfolio investors made a net investment of Rs 18,620 crore in equities this month (till May 16). The total outflow stood at Rs 93,731 crore in 2025 so far.
India's equity markets witnessed a sharp resurgence in FPI activity in April. The sustained buying spree that began in mid-April continued in the current month, reflecting renewed investor confidence.
"A key catalyst was the announcement of a ceasefire between India and Pakistan, which eased regional tensions and lifted investor sentiment," Himanshu Srivastava, Associate Director - Manager Research, Morningstar Investment, said.
The global risk appetite also improved after a 90-day tariff truce between the US and China, prompting foreign investors to reallocate capital toward emerging markets, with India being a key beneficiary, he added.
"With the global trade scenario improving after the pause in trade war between the US and China and the end of the India-Pakistan conflict, the investment scenario has improved," VK Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd, said.
On the domestic front, India's strong growth outlook, accommodative monetary policy, and robust corporate earnings expectations supported the FPIs' interest.
On the other hand, FPIs withdrew Rs 6,748 crore from the debt general limit and invested Rs 1,193 crore in debt voluntary retention during the period under review.
Last week, Sebi released the consultation paper proposing to grant certain waivers/relaxations to FPIs investing in the Indian government bonds through the Voluntary Retention Route (VRR) and Fully Accessible Route (FAR) to provide momentum to the drying bond market.
This move comes at a critical time, as foreign investors continue to adopt a cautious outlook towards Indian bond markets, especially after the inclusion of Indian government bonds in the global bond indices, Manoj Purohit, Partner & Leader, Financial Services Tax, Tax & Regulatory Services, BDO India, said.