Foreign Portfolio Investors (FPI) have lapped up shares from telecom and services sectors the most in the month of May 2025. The telecom sector saw FPI inflows of Rs 8,089 crore, which represents 40.7 per cent of the total FPI net inflow into Indian equities during the month. FPIs had infused a net of Rs 19,860 crore in May 2025, the highest monthly inflow this calendar year so far. In the services sector, FPIs bought Rs 7,972 worth of shares during the month, representing 40.1 per cent of total FPI net inflows. Cumulatively, both sectors received 80.9 per cent of the total FPI net inflows during the month.
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The rest of the inflows went into Capital Goods, Chemicals, Oil and Gas, Construction Materials and FMCG sectors.
According to Manasvi Garg, a Securities and Exchange Board of India-registered investment advisor (Sebi RIA), CFA, and founder and CEO of Moneyvesta, the strong FPI inflows in May 2025 were led by positive developments in both the Indian economy and global trade. Garg told Outlook Money that a temporary pause in trade tariffs between India and the United States (US) lifted investor sentiment, especially after the US Commerce Secretary Howard Lutnick expressed confidence in finalising a trade deal with India by the July 9, 2025 deadline.
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He added that towards the end of the month, optimism grew further as India reported better-than-expected economic data. For FY25, GDP growth stood at 6.5 per cent, led by a strong 7.4 per cent growth in the fourth quarter, the country’s best quarterly performance in the past year.
What Led FPIs To Shore Up Telecom Stocks
Garg attributed the sharp rise in FPI investments in the telecom sector last month to the aggressive foreign buying in Bharti Airtel. He added that FPIs were also drawn to the sector because of “transformative developments” taking place, especially surrounding Vodafone Idea.
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He said, “On May 19, the Supreme Court dismissed petitions filed by Vodafone Idea, Bharti Airtel, and Tata Teleservices seeking relief from interest and penalties related to Adjusted Gross Revenue (AGR) dues. Subsequently, Vodafone Idea warned that it may not be able to sustain operations beyond FY26, intensifying uncertainty around its future. If Vodafone Idea ceases to exist, it could lead to a significant shift in market share. Bharti Airtel and Reliance Jio would likely gain a large number of Vodafone’s customers, making their positions even stronger in the industry.”
What Led FPI Buying In Services Sector Stocks
Garg explained that the services sector witnessed strong FPI inflows owing to the passive funds inflows into Eternal, the parent company of food delivery platform Zomato and quick commerce app Blinkit.
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He said, “Much of the buying came through passive funds, particularly in Zomato, following its inclusion in the Nifty 50 index on March 28. The entry of Zomato into the benchmark index has increased interest from index-tracking funds and global investors.”