Equity Flows Improve After A Two Week Outflow

17 Sep 2025 , 02:44 PM

FPI flows turned positive last week with a net inflow of INR 27.4 bn, breaking a streak of two-weeks of outflows. The rebound was driven by secondary market equity purchases of INR 23.5 bn, supported by INR 1.4 bn from IPOs. Debt saw a modest inflow of INR 2.4 bn, while hybrids posted a small outflow of INR 0.5 bn. The turnaround reflects improved sentiment toward Indian equities.

 

FPI flows for the week ended 2025-09-12: INR 27.4 billion

The week ending 12 September 2025 witnessed a net Foreign Portfolio Investment (FPI) inflow of INR 27.4 bn into India, after two consecutive weeks of outflows. The net-inflow was mainly driven by the equities as primary market equity stood at INR 1.45 bn and a robust secondary‑market uptrend of INR 23.53 bn. Debt, which brought in INR 2.41 bn, and mutual‑fund holdings worth a paltry INR 0.49 bn were the other two contributors to inflows by such funds. The hybrid category, on the other hand, witnessed a marginal outflow of INR 0.48 billion.Compared to the past ten weeks, the latest FPI inflows are a notable positive. They are the highest over that period and mark a strong reversal compared to the outflows seen during the week of 29^th August 2025. Improving geopolitics and a rebound in sectors like IT services likely led to the positive FII outflows. Debt flows, on the other hand, were likely influenced by a risk-on rally in global assets.

 

Figure: FPI/FII flows for the week ending 2025-09-12

Asset Class	Net Investment (INR Billions)
FPI	27.4
FPI Equity	24.98
FPI Equity-Primary	1.45
FPI Equity-Secondary	23.53
FPI Debt	2.41
FPI Mutual Fund	0.49
FPI Hybrid	-0.48
FPI AIF	0.0

Source: NSDL

 

Figure: Recent history of FPI flows

 

Week Ending	Net Investment (INR Billions)
12 Sep, 2025	27.4
03 Sep, 2025	-17.9
29 Aug, 2025	-210.57
22 Aug, 2025	11.36
14 Aug, 2025	21.08
08 Aug, 2025	-45.96
01 Aug, 2025	-117.27
25 Jul, 2025	-69.4
18 Jul, 2025	-12.15
11 Jul, 2025	-13.51

Source: NSDL

 

Figure: History of FPI flows

Source: NSDL

 

FPI flows in Equity for the week ended 2025-09-12: INR 25.0 billion

The last week (end 12 September 2025) witnessed a net FII equity inflow of INR 25 bn, primarily supported by strong secondary‑market purchases of INR 23.5 bn and relatively modest primary‑market subscriptions of only INR 1.4 bn. It represents a significant about‑turn as outflows had dominated for much of the recent history. FII heavy sectors like IT have likely driven the rebound. Optimism over buybacks had led to a strong rally in IT services.

 

Figure: Recent history of FPI flows in Equity

Week Ending	FPI.Equity	FPI.Equity.Primary	FPI.Equity.Secondary
11 Jul, 2025	0.7	12.8	-12.0
18 Jul, 2025	-40.9	9.2	-50.0
25 Jul, 2025	-31.8	80.4	-112.2
01 Aug, 2025	-174.2	5.2	-179.4
08 Aug, 2025	-75.0	14.4	-89.4
14 Aug, 2025	-70.9	13.8	-84.6
22 Aug, 2025	4.8	7.4	-2.6
29 Aug, 2025	-222.8	5.0	-227.8
03 Sep, 2025	-32.7	2.3	-35.0
12 Sep, 2025	25.0	1.4	23.5

Source: NSDL

 

Figure: History of FPI flows in Equity

Source: NSDL

 

FPI flows in Debt for the week ended 2025-09-12: INR 2.4 billion

Recent data shows that debt flows in the previous week were muted at INR 2.41bn. These were amongst the lowest debt flows seen in the recent past. For instance, the prior two weeks had witnessed inflows of INR 10 bn and INR 23 bn respectively. Further, these were sharply down from the debt flows seen in early August – INR 57 bn and INR 90 bn. Rising risk-on sentiment amidst a US fueled equity rally has likely been among the key reasons for muted debt flows.

Figure: Recent history of FPI flows in debt

Week Ending	Net Investment (INR Billions)
12 Sep, 2025	2.4
03 Sep, 2025	22.9
29 Aug, 2025	10.5
22 Aug, 2025	6.7
14 Aug, 2025	90.0
08 Aug, 2025	13.9
01 Aug, 2025	56.6
25 Jul, 2025	-41.0
18 Jul, 2025	29.3
11 Jul, 2025	-14.6

Source: NSDL

 

Figure: History of FPI flows in debt

Source: NSDL