FPI infuse $2.32 Billion into Indian equities in May 2025

5 Jun 2025 , 11:00 AM

FPIS NET BUY $2.32 BILLION IN MAY 2025

The pattern of FPI flows in May 2025 was a stark contrast to March and April. The months of March and April 2025 had seen heavy selling in the first fortnight and sharp buying rebound in the second fortnight. FPIs net sold $(13.4) Billion of equities between January and March 2025, but April saw a minor revival with FPI inflows of $528 Million. In comparison, May 2025 was a lot more decisive with $2.32 Billion of inflows into equities. While FPIs net bought $1.50 Billion in first fortnight of May, they added $0.82 Billion in the second half.

The FPI flows for May were influenced by the pause in tariffs and the hopes of an Indo-US trade deal. The US Commerce Secretary promised to fructify the trade deal before the pause in reciprocal tariffs gets over on July 09, 2025. Late in May, the India GDP and trade deficit data were put out. The FY25 GDP growth at 6.5% was better than expected, helped by a rebound in Q4 at 7.4%. The fiscal deficit overshot by 50 bps in absolute terms, but as a share of GDP, it stayed within the budgeted target of 4.8%; thanks to higher nominal GDP!

What was the macro picture of FPI flows across equity and debt for May 2025? FPIs were net buyers in secondary market equities worth ₹18,083 Crore, and infused ₹1,777 Crore into IPOs; making them net buyers in equities of ₹19,860 Crore. Debt also saw net FPI buying of ₹11,090 Crore in May 2025 as FPI flows gravitated to Indian long duration bonds on rate cut hopes. Overall, FPI inflows into India in May 2025 stood at ₹30,950 Crore.

FPI AUC EXHIBITS A SMALL BOUNCE IN MAY 2025

Assets under custody (AUC) is a function of FPI flows and price movement. In April 2025, FPI AUC jumped from $781 Billion to $811 Billion. In May 2025, the FPI AUC bounced further to $834 Billion. FPI Equity AUC is still below the peak of $931 Billion in September 2024. Even consolidated FPI AUC at $913 Billion is below September 2024 peak of $1.04 Trillion.

Industry Group	FPI AUC (May-25) ($ Billion)	FPI AUC (Apr-25) ($ Billion)
Financials (BFSI)	264.12	258.45
Information Technology (IT)	68.70	66.19
Oil & Gas	60.73	59.26
Automobiles and Auto Components	57.54	55.03
Healthcare and Pharmaceuticals	54.84	55.41
Fast Moving Consumer Goods (FMCG)	45.26	45.76
Capital Goods	44.33	38.14
Telecommunications	39.57	38.97
Consumer Services	33.76	33.76
Power (generation and transmission)	28.77	29.64
Metals and Mining	23.06	21.75
Consumer Durables	22.45	22.63
Services	18.87	16.72
Realty	17.26	16.54
Chemicals	14.93	14.47
Construction	14.88	13.38
Cement	13.28	13.57
Top 17 Sectors	821.82	799.68
Other 6 sectors	11.89	10.89
Total FPI AUC	833.71	810.57

Data Source: NSDL

These are the top 17 sectors where FPI AUC is more than $10 Billion as of the close of May 2025. Out of the 23 sectors identified by NSDL, AUC of top-17 sectors accounted for 98.57% of total FPI AUC of $833.71 Billion. Despite the AUC bounce in the last 3 months, the FPI AUC as of May 2025 is -10.5% below the peak AUC as of September 2024.

What about the key components of AUC as of April 2025. At $264.12 Billion, BFSI continues to dominate the AUC stakes. Among specific sectors, the sectors with highest accretion in AUC over April were; Capital Goods, Services, Construction, Metals & Mining, Automobiles, and Realty. AUC contraction was seen in Cement, Power, FMCG, and Healthcare.

TELECOM, SERVICES, AND CAPITAL GOODS DRIVE FPI BUYING

In May 2025, FPIs were net buyers worth $2.32 Billion. Here is the sector wise break-up of positive FPI flows in May 2025.

FPI Net Buying in Sectors	H1-May-25 ($ Million)	H2- May-25 ($ Million)	May-25 ($ Million)
Telecommunications	+121	+825	+946
Services	+206	+727	+933
Capital Goods	+261	+362	+623
Financial Services (BFSI)	+552	-82	+470
Oil & Gas	+249	+46	+295
Chemicals	+97	+56	+153
FMCG Sector	-124	+219	+95

Data Source: NSDL

The top 3 sectors in terms of May 2025 flows; Telecom, Services, and Capital Goods saw buying in the first and the second fortnight of May 2025. Telecom buying was again dominated by Bharti Airtel, while Services saw buying in Eternal (Zomato) by passive funds. Capital goods saw strong gains on the back of robust government capex spending in Q4.

HEALTHCARE, POWER, IT, AND CONSUMER STOCKS SELL OFF

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

FPI Net Selling in Sectors	H1-May-25 ($ Million)	H2- May-25 ($ Million)	May-25 ($ Million)
Healthcare	-71	-235	-306
Power	-84	-208	-292
Information Technology (IT)	+34	-319	-285
Consumer Durables	-73	-130	-203
Realty	-98	-96	-194

Data Source: NSDL

The selling theme for FPIs in May 2025 was two-fold. Firstly, it was about global stories like pharma and IT. Secondly, it was about the Indian spending plays like consumer durables and realty. FPIs are cautious about both these stories and that reflected in the FPI sell-off during the month of May 2025.

OUTLOOK FOR FPI FLOWS IN COMING MONTHS

With the GDP and the fiscal deficit data out of the way, there are other data points that the FPIs will focus on. One thing would be the pace at which the Indo-US trade deal moves forward, and that would be a great positive. Secondly, FPIs are also tracking the spreads between the US bond yields and the India bond yields. Hence, the RBI may be cautious about rate cuts beyond 25 bps in June 2025. Above all, the FPIs would want the border situation to settle down so that geopolitical risk of India investing is out of the way!