FPIs Infuse Rs 19,860 Crore Into Indian Equities In May, Highest Monthly Inflow So Far In 2025

FPI NSDL Data: Foreign portfolio investors (FPIs) made a strong comeback in May 2025, logging the highest monthly inflow into Indian equities so far in this calendar year. According to data from the National Securities Depository (NSDL), FPIs invested Rs 19,860 crore during the month, registering the second consecutive month of net inflow. In April 2025, FPIs had pumped Rs 4,223 crore into the domestic equity market. However, the first quarter of the year saw persistent selling pressure from foreign investors, with net outflows of Rs 78,027 crore in January, Rs 34,574 crore in February, and Rs 3,973 crore in March.

Despite the recent reversal in trend, FPIs are still overall net sellers for 2025. As of May 30, total net outflows for the year is Rs 92,491 crore. 

In 2024, foreign flows had seen a volatile action, with monthly inflows and outflows witnessing wild swings. However, by the end of last year, FPIs were marginal net buyers with a net investment of Rs 427 crore in Indian equities.

Broader Market Outperforms Sensex, Nifty 50 In May 2025

The benchmark indices, the Sensex and the Nifty 50 gained 1.5 per cent and 1.7 per cent during the month, respectively. 

The broader market saw even sharper gains as the Nifty Smallcap 100 climbed 8.70 per cent and the Nifty Midcap 100 surged 6.10 per cent.

The Nifty 500 index, which represents 92.3 per cent of the free float market capitalisation of the stocks listed on the NSE, advanced 3.50 per cent. The BSE AllCap index, which compries of 1,230 BSE-listed stocks across market capitalisations, too, gained 3.90 per cent during the month, clearly outperforming the benchmark indices.

Vinod Nair, head of research at Geojit Investments said that mid- and small-cap segments showed resilience on account of stronger-than-expected earnings performance. On the other hand, large-cap stocks have lagged due to subdued results from key bluechip companies.

What Pushed FPIs To Bet Higher On Indian Equities

V.K. Vijayakumar, chief investment strategist at Geojit Investments said that a combination of global factors, such as a weakening dollar and slowing economies in the US and China, along with positive domestic macros like high gross domestic product (GDP) growth, easing inflation, and declining interest rates, are driving foreign inflows into India.

He said that in the first half of May, foreign investors showed buying interest in sectors, such as automobile and auto components, telecom, and financials. 

“The better-than-expected GDP growth of 7.40 per cent in the fourth quarter of the previous fiscal year (Q4 FY25) signals a rebound in growth, which could fuel a recovery in corporate earnings in FY26,” he said. 

He added that foreign inflows are likely to continue. However, he cautioned that some profit-taking might occur at higher valuation levels.