FPI buying rebounds in second fortnight of April 2025

8 May 2025 , 02:00 PM

FPIS NET BUY $528 MILLION IN APRIL 2025

The pattern of FPI flows in April 2025 was almost similar to March; with heavy selling in the first fortnight and a buying rebound in the second fortnight. After $(13) billion of net selling by FPIs in Jan-Feb 2025, the selling had tapered to just about $(402) Million in March. April 2025 saw the first turnaround with $528 Million of net buying. However, while first half of April saw net selling of $(3,957) Million, the second half saw net buying of $4,485 Million.

The month of April began on a dull note with reciprocal tariffs imposition. However, the sentiments improved after Trump agreed to put tariffs on hold for a period of 90 days on all countries except China. In addition, the RBI MPC cut the repo rates by another 25 bps while the consumer inflation for March came in sharply lower at 3.34%. That is well below the RBI target of 4.00%. More importantly, IMD and SKYMET have projected normal to surplus rains this year, despite the risk of El Nino. That kept FPI sentiments buoyant.

Let us turn to the macro picture of flows across equity and debt for April 2025. FPIs were net buyers in secondary market equities worth ₹3,243 Crore, and infused ₹980 Crore into IPOs; making them net buyers in equities of ₹4,223 Crore. However, debt saw net FPI selling of ₹(24,413) Crore in April 2025 due to narrowing yield spreads with the US benchmark; resulting in overall  FPI outflows of ₹(20,190) Crore for April 2025. 

FPI AUC EXHIBITS A BOUNCE IN APRIL 2025

Assets under custody (AUC) is a function of FPI flows and price movement. In March 2025, FPI AUC jumped from $714 Billion to $781 Billion. In April 2025, the FPI AUC bounced further to $811 Million. FPI AUC had peaked at $931 Billion in September 2024.

Industry Group	FPI AUC (Apr-25) ($ Billion)	FPI AUC (Mar-25) ($ Billion)
Financials (BFSI)	258.45	244.03
Information Technology (IT)	66.19	70.01
Oil & Gas	59.26	54.62
Healthcare and Pharmaceuticals	55.41	54.07
Automobiles and Auto Components	55.03	52.69
Fast Moving Consumer Goods (FMCG)	45.76	42.93
Telecommunications	38.97	35.20
Capital Goods	38.14	37.95
Consumer Services	33.76	31.65
Power (generation and transmission)	29.64	28.97
Consumer Durables	22.63	21.58
Metals and Mining	21.75	23.41
Services	16.72	16.23
Realty	16.54	15.93
Chemicals	14.47	13.59
Cement	13.57	13.28
Construction	13.38	14.18
Top 17 Sectors	799.68	770.29
Other 6 sectors	10.89	10.31
Total FPI AUC	810.57	780.60

Data Source: NSDL

The table above captures the top 17 sectors where the FPI AUC is more than $10 Billion as of the close of April 2025. Out of the 23 sectors identified by NSDL, AUC of top-17 sectors accounted for 98.66% of total FPI AUC of $810.57 Billion. Despite the AUC bounce in the last 2 months, the FPI AUC as of April 2025 is -13.0% below the peak AUC as of September 2024.

What about the key components of AUC as of April 2025. At $258.45 Billion, BFSI continues to dominate the AUC stakes and has also seen the best AUC accretion over Feb-25. Among specific sectors, while telecom and chemicals improved their rankings; IT, metals and construction saw depletion in FPI AUC over the previous month.

BFSI AND TELECOM GAIN DOMINATE FPI BUYING

In April 2025, FPIs were net buyers worth $528 Million, the first positive monthly figure in 2025. Here is the sector wise break-up of positive FPI flows in April 2025.

FPI Net Buying in Sectors	H1-Apr-25 ($ Million)	H2- Apr-25 ($ Million)	April-25 ($ Million)
Financial Services (BFSI)	-525	+2,694	+2,169
Telecommunications	+249	+295	+544
Fast Moving Consumer Goods (FMCG)	+69	+274	+343
Consumer Services	-19	+231	+212
Others	+35	+168	+203
Power	+3	+103	+106
Chemicals	-36	+139	+103

Data Source: NSDL

Barring telecom and FMCG, other sectors saw a sharp recovery in the second fortnight of April 2025. Like in March, the inflows were dominated by BFSI (as an India play) and telecom (led by Bharti Airtel). The BFSI buying could also be attributed to beta buying since its weight in the index had come down substantially.

IT, METALS, AUTOS DRIVE FPI SELLING IN APRIL

Here is a sectoral break-up of FPI net outflows from Indian equities in April 2025.

FPI Net Selling in Sectors	H1-Apr-25 ($ Million)	H2- Apr-25 ($ Million)	April-25 ($ Million)
Information Technology (IT)	-1,614	-163	-1,777
Metals & Mining	-330	-68	-398
Automobiles & Ancillaries	-299	-76	-375
Construction	-287	-50	-337

Data Source: NSDL

The selling theme for FPIs in April 2025 was largely about getting out of globally exposed businesses and getting into India-oriented businesses. IT is already facing the pressure of lower corporates spends on IT, while metals is still too dependent on China demand. Automobiles are already subjected to inbound tariffs in the US. Other than automobiles, the other three sectors also saw depletion in FPI AUC in April 2025.

OUTLOOK FOR FPI FLOWS IN COMING MONTHS

Broadly, there will be 4 things that FPIs would be looking for. Firstly, they will be looking for clarity on the future direction of the border tensions with Pakistan. Secondly, they will be keen to know the impact of reciprocal tariffs, when they are actually imposed. Thirdly, the RBI action on rates will also be in focus. But, above all, the focus will now be on the GDP data that MOSPI will announce for FY25 on the last day of May 2025.