Understanding FPI Investment Trends in Indian Equities

June 2025 Sees Big Investments, Early July Faces Withdrawals

Foreign Portfolio Investors (FPIs) invested Rs 14,590 crore in Indian equities in June 2025. This is the third month in a row with net inflows. Several factors contributed to this trend:

• Better global liquidity
• Reduced geopolitical tensions
• A rate cut by the Reserve Bank of India

Early July Sees a Change

The trend reversed in early July. FPIs withdrew Rs 1,421 crore in the first week of the month. This data comes from depositories.

Expect Volatile Flows

Experts predict that FPI flows will remain volatile in the near future due to:

• Uncertainty around US economic data
• Tariff deadlines

Vaqarjaved Khan, Senior Fundamental Analyst at Angel One, said:

“FPI flows are expected to remain choppy due to tariff deadline developments and US data volatility.”

Focus on Corporate Earnings

According to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, investor sentiment will now focus on corporate earnings. He stated:

“If the results show earnings recovery, that will be positive. Disappointment on these factors can impact the market and flows.”

Recent Investment Trends

Depository data shows the following net investments by FPIs in equities:

• June 2025: Rs 14,590 crore
• May 2025: Rs 19,860 crore
• April 2025: Rs 4,223 crore

Before these inflows, FPIs were net sellers for three straight months:

• March 2025: Rs 3,973 crore outflow
• February 2025: Rs 34,574 crore outflow
• January 2025: Rs 78,027 crore outflow

This brings the total net FPI outflow in 2025 so far to Rs 79,322 crore.

Cautious but Improving Approach

Himanshu Srivastava, Associate Director at Morningstar Investment, noted:

“FPIs showed a cautious but improving stance in June 2025. They started the month with notable outflows from the equity markets. This was due to high US bond yields, trade tensions, overvalued Indian stocks, and a worsening geopolitical environment.”

He added that sentiment improved in the latter half of June due to:

• Stable global liquidity conditions
• Reduced geopolitical risks
• RBI’s rate cut
• Stronger rupee
• Lower crude oil prices

Sectoral Trends

In June, FPIs were net buyers in:

• Financials
• Autos and auto components
• Oil and gas

They sold off capital goods and power stocks during the same period.

Debt Market Movements

In the debt market, FPIs pulled out:

• Rs 6,121 crore from the general limit
• Rs 6,366 crore from the voluntary retention route