Rs 37,500 Crore Inflow Recorded In Last 10 Days – Here’s What’s Fuelling FPI Buying

The domestic stock market saw a sharp upward rally over the past few weeks, driven by strong foreign fund inflows. Foreign portfolio investors (FPIs) have been net buyers for the last 10 consecutive sessions, buying shares worth Rs 37,547.44 crore, according to data from National Securities Depository (NSDL).

For the entire month of April 2025, FPIs net bought shares worth Rs 4,223 crore. This is the first month when FPIs turned net buyers after the previous three consecutive months of incessant selling, according to NSDL data. FPIs had sold equities worth Rs 3,973 crore in March, Rs 34,574 crore in February, and Rs 78,027 crore in January of this year. The last time FPIs were net buyers was in December 2024, when they invested a net Rs 15,446 crore in the market.

In April 2025, the Sensex saw a nearly 9,000-point or 12.3 per cent rally since its recent low hit on April 7. Similarly, Nifty 50 also rallied around 2,600 points or 11.9 per cent in the same time period.

What Pulled FPIs To Indian Stock Market

Manasvi Garg, a Securities and Exchange Board of India-registered investment advisor (Sebi RIA), CFA, and founder and CEO of Moneyvesta, cited three factors which pulled FPIs back to India’s stock market.

These were:

1] Attractive Valuations Post Sharp Corrections: The domestic market saw a phase of sharp corrections between October 2024 and February 2025, where both the headline indices–Sensex and Nifty 50–lost around 13 per cent each. The broader market saw even sharper corrections, with the Nifty Smallcap 100 falling over 23 per cent and Nifty Midcap 100 losing more than 20 per cent.

During this five-month period, FPIs sold Indian equities of worth Rs 2,12,784 crore, which Garg explains was due to “stretched valuations” of India’s stock market. He says, “The NSE 500 corrected over 20 per cent from its September 2024 high of 24,573 to a low of 19,520 in April 2025, making valuations far more reasonable and attractive to foreign investors.”

At its peak on September 26, 2024, the Nifty 500 index, which represents about 92.29 per cent of the free float market capitalisation of all the stocks listed on the National Stock Exchange (NSE), was trading at a rich price-to-earnings (P/E) ratio of 28.04.

After months of market corrections, its P/E slipped to as low as 21.84, making valuations seem more reasonable to investors. As of he latest trading session, April 30, the Nifty 500 P/E stood at 24.09.

2] Strong Corporate And Banking Balance Sheets: The March quarter (Q4 FY25) earnings season is underway and several Indian companies have already reported their Q4 numbers.

India's most valuable company by market cap, Reliance Industries (RIL) reported a 9.9 per cent year-on-year (YoY) growth in operating revenue for Q4 FY25, which came in at Rs 2.64 lakh crore. Its profit after tax (PAT) for the quarter grew 6.1 per cent YoY to Rs 22,434 crore. For the full financial year FY25, the company’s total revenue was up 7.3 per cent at Rs 9.98 lakh crore, while PAT rose 2.7 per cent to Rs 80,787 crore.

Several brokerages noted that the company beat their estimates. Post earnings announcement, in the previous three days, RIL shares surged over 8 per cent.

HDFC Bank, India's largest private lender, reported a PAT of Rs 17,616 crore for Q4 FY25, up 6.7 per cent compared to last year. Its net interest income (NII) grew 10.3 per cent to Rs 32,070 crore.

The bank's net interest margin (NIM) stood at 3.54 per cent on total assets and 3.73 per cent on interest-earning assets. Provisions dropped significantly to Rs 3,190 crore in Q4 FY25, down from Rs 13,510 crore in the same quarter last year. Average deposits for the quarter grew 15.8 per cent to Rs 25.28 lakh crore, while average CASA deposits increased by 5.7 per cent to Rs 8.29 lakh crore.

Gross advances as of March 31, 2025, were Rs 26.43 lakh crore, showing a 5.4 per cent YoY growth. The bank's Capital Adequacy Ratio (CAR) increased to 19.6 per cent from 18.8 per cent last year. On the asset quality front, gross non-performing assets (GNPAs) were 1.33 per cent of gross advances, up from 1.24 per cent a year ago but down from 1.42 per cent in December 2024. Net NPAs were 0.43 per cent of net advances. Post results announcement, several

Similarly, several other banks and companies have also reported estimate-beating Q4 numbers, which have strengthened investor sentiment.

Garg says: “Indian companies are running with low leverage and strong cash flows. Banks have improved asset quality and are well-capitalised, thus giving investors confidence in the resilience of India’s financial system and its long-term growth.”

3] Favourable Global Trade Positioning: According to Garg, India is better placed than China and many emerging markets in terms of tariffs and trade sentiment.

Lately, markets have been reeling under high volatility, both globally as well as in India, largely due to US President Donald Trump’s back-and-forth trade policies. The Trump administration imposed tariffs on several of its trading partner countries, including India and China, with tariffs reaching as high as 3500 per cent on some countries.

“With global supply chains diversifying, India is emerging as a strong alternative, attracting long-term capital flows,” he adds.

DII Buying Remains Strong

Meanwhile, the domestic institutional investors (DIIs) have stood like a rock, backing the Indian stock market every time FPIs have pulled out.

According to data from Stock Edge, a self-research stock market platform, DIIs have been consistent net buyers for the last 21 consecutive months. Garg says, “DIIs have been steady buyers for months. Now, with FIIs joining in, both engines are firing together. Coupled with strong fundamentals and corrected valuations, this dual flow can accelerate market recovery.”