Weekly Musings – FPI flows for week ended December 27, 2024

30 Dec 2024 , 03:19 PM

FPI OUTFLOWS DEEPEN IN THE WEEK

There were expectations that short covering would be seen in the last week of 2024, but that was missing. We now have to wait for 2025 for fresh EM allocations. The week saw the Sensex rallying by 0.8%, but that did little to boost the enthusiasm of the FPIs. FPI outflows at $600 Million were far from alarming, but they are sharply higher MOM. Amidst the chaos in the secondary markets, the primary markets continued to see action in a truncated week, as FPIs participated in IPOs via pre-IPO placements, anchor allocation, and QIB subscription.

MACRO FPI FLOW PICTURE UP TO DECEMBER 27, 2024

The table captures monthly FPI flows into equity and debt for the last 3 calendar year viz., 2022, 2023, and 2024.

Calendar Month	FPI Flows Secondary	FPI Flows Primary	FPI Flows Equity	FPI Flows Debt/Hybrid	Overall FPI Flows
Calendar 2022 (₹ Crore)	(146,048.38)	24,608.94	(121,439.44)	(11,375.78)	(132,815.22)
Calendar 2023 (₹ Crore)	1,27,759.75	43,347.14	1,71,106.89	65,954.38	2,37,061.27
Jan-2024 (₹ Crore)	(28,863.89)	3,120.34	(25,743.55)	19,150.21	(6,593.34)
Feb-2024 (₹ Crore)	(3,194.72)	4,733.60	1,538.88	30,277.95	31,816.83
Mar-2024 (₹ Crore)	29,152.54	5,945.78	35,098.32	16,987.88	51,996.20
Apr-2024 (₹ Crore)	(23,331.04)	14,659.77	(8,671.27)	(7,588.75)	(16,260.02)
May-2024 (₹ Crore)	(30,613.87)	5,027.54	(25,586.33)	12,675.47	(12,910.86)
Jun-2024 (₹ Crore)	24,345.55	2,218.99	26,564.54	15,192.90	41,757.44
Jul-2024 (₹ Crore)	26,059.05	6,305.79	32,364.84	16,431.20	48,796.04
Aug-2024 (₹ Crore)	(5,552.01)	12,872.13	7,320.12	18,173.17	25,493.29
Sep-2024 (₹ Crore)	46,552.40	11,171.24	57,723.64	35,813.99	93,537.63
Oct-2024 (₹ Crore)	(1,13,858.81)	19,841.86	(94,016.95)	(2,340.68)	(96,357.63)
Nov-2024 (₹ Crore)	(39,315.78)	17,703.98	(21,611.80)	167.80	(21,444.00)
Dec-2024 (₹ Crore) #	(656.74)	17,331.85	16,675.11	12,565.17	29,240.28
Total for 2024 (₹ Crore)	(1,19,277.32)	1,20,932.87	1,655.55	1,67,416.31	1,69,071.86
For 2024 ($ Million)	(14,148.40)	14,416.24	267.84	20,056.97	20,324.81
# – Recent Data is up to December 27, 2024

Data Source: NSDL (Negative figures in brackets)

It looks like year 2024 will be a year of neutral flows into equities, with debt being the saving grace. Out of the total net FPI flows of ₹1,691 Billion in calendar 2024, FPI infusion in debt was ₹1,674 Billion (99%), while equities saw FPI inflows of just ₹17 Billion. The net FPI inflow of $20.32 Billion in 2024 comprises of FPI inflows into debt of $20.06 Billion and $0.27 Billion of net FPI inflows into equities. If you look at the break-up of this $0.27 Billion equity inflows in 2024, secondary market equities saw net selling of $(14.15) Billion, while IPOs saw FPI infusion of $14.42 Billion.

FPI SENTIMENTS – THE WEEK THAT WAS

For the week to December 27, 2024, FPIs remained net sellers to the tune  of $600 million, sharply higher than the last couple of weeks. Here is the week that was.

• The RBI MPC announced its policy minutes during the week. The final verdict was a lot more split than it appeared with 2 out of the 6 members calling for a 25 bps rate cut. However, concerns over the last mile inflation prevailed in the final analysis.
• The RBI announced the current account deficit (CAD) for Q2FY25 at $11.2 billion or 1.2% of GDP. That is much lower than the 1.6% CAD that economists were expecting. The services surplus and remittances more than offset the merchandise trade deficit.
• Government plans to cut taxes for the middle class in the upcoming budget to give a boost to consumption. The income level up to ₹10 lakhs may be made tax free, although it would be subject to subscription to the new tax regime (NTR) only.
• Rupee touched a low of ₹85.81/$ on Friday, before it settled around ₹85.54/$ for the week, still among the lowest level ever. The rupee has fallen nearly 3% in the current year; triggered by FPI outflows, strength in dollar index and weak Chinese Yuan.
• Reliance may face challenges maintaining the tag of most valuable company in India after its market cap slipped 23% from the peak. Both TCS and HDFC bank are hot in pursuit and could overtake Reliance Industries in market cap in this year.
• Tata Capital may be on the road to an IPO, more than a year after Tata Technologies hit the IPO market with an IPO. However, the more interest point to watch is whether Tata Sons will finally convert itself into a listed company.

DAILY FPI EQUITY FLOWS FOR LAST 4 ROLLING WEEKS

Here is the last 4 rolling weeks data on FPI flows as it shows us a time series moving average of FPI flows.

Date	FPI Flow (₹ Crore)	Cumulative flows	FPI Flow($ Million)	Cumulative flows
02-Dec-24	-990.32	-990.32	-117.21	-117.21
03-Dec-24	3,793.55	2,803.23	447.98	330.77
04-Dec-24	9,297.53	12,100.76	1,097.12	1,427.89
05-Dec-24	2,863.58	14,964.34	338.13	1,766.02
06-Dec-24	9,489.29	24,453.63	1,119.90	2,885.92
09-Dec-24	-786.13	23,667.50	-92.86	2,793.06
10-Dec-24	599.78	24,267.28	70.79	2,863.85
11-Dec-24	1,867.12	26,134.40	220.04	3,083.89
12-Dec-24	194.75	26,329.15	22.96	3,106.85
13-Dec-24	-3,563.53	22,765.62	-419.87	2,686.98
16-Dec-24	2,936.51	25,702.13	346.12	3,033.10
17-Dec-24	189.10	25,891.23	22.29	3,055.39
18-Dec-24	-2,386.74	23,504.49	-281.03	2,774.36
19-Dec-24	-922.34	22,582.15	-108.59	2,665.77
20-Dec-24	-793.19	21,788.96	-93.23	2,572.54
23-Dec-24	-1,872.95	19,916.01	-220.12	2,352.42
24-Dec-24	155.40	20,071.41	18.27	2,370.69
25-Dec-24	0.00	20,071.41	0.00	2,370.69
26-Dec-24	-1,804.10	18,267.31	-211.77	2,158.92
27-Dec-24	-1,592.20	16,675.11	-186.73	1,972.19

Data Source: NSDL

• In last 7 rolling weeks, FPIs saw net outflows of $(114) Million, $(199) Million; net inflows of $2,886 Million, $587 Million; net outflows of $(388) Million, $(288) Million, and $(2,375) Million. In the week to December 27, 2024 net FPI equity outflows were to the tune of $(600) Million.
• If you look at the last 4 rolling weeks on a cumulative basis, total net FPI inflows into equities were to the tune ₹16,675 Crore or $1,972 Million; with the broad trend mixed.

The only big data points that now remain are the current account deficit (CAD) for Q2FY25 and the new year allocation of FPIs.