FPIs invest ₹19,860cr in Indian equities this month
What's the story
Foreign portfolio investors (FPIs) have shown strong confidence in India's equity market by investing a whopping ₹19,860 crore in May.
The investment is driven by positive global economic indicators and robust domestic fundamentals.
This comes after a net investment of ₹4,223 crore in April.
Prior to that, FPIs had pulled out money from the market with withdrawals of ₹3,973 crore in March and ₹34,574 crore in February.
Investment outlook
Investment strategy and market response
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said that while FPIs are likely to keep investing in India, they may also sell at higher levels due to stretched valuations.
The latest investment has reduced the outflow to ₹92,491 crore in 2025 so far.
This is a sharp contrast from earlier this year when FPIs withdrew a massive ₹78,027 crore in January alone.
Market dynamics
Factors influencing FPI flows
Himanshu Srivastava, Associate Director at Morningstar Investment, said that several factors influenced FPI flows in May.
He claimed that easing US inflation and expectations of an interest rate cut by the Federal Reserve made emerging markets like India more attractive.
Domestically, strong GDP growth, robust corporate earnings, and policy reforms have boosted investor confidence.
Sector focus
Sector-wise investment in May
In terms of sectors, FPIs have shown interest in autos, telecom, components, and financials in the first half of May.
Apart from equities, they also invested ₹19,615 crore in debt general limit and ₹1,899 crore in debt voluntary retention during this period.
This diversified investment strategy highlights their confidence in India's economic potential across different sectors.