Weekly Musings – FPI flows for week ended February 21, 2025

24 Feb 2025 , 02:26 PM

FPIs STAY NET SELLERS IN TRUNCATED WEEK

Compared to previous week, the FPI outflows were relatively subdued, thanks largely to the surge of FPI flows into the Hexaware IPO during the week. This insured an approximate inflow of nearly $1 billion on Thursday. It was a truncated week on account of Shivaji Jayanthi with FPI data only available for 4 days. However, this does mark the twelfth consecutive week of net selling by FPIs, who have sold close to $11.25 Billion in your India account. Clearly, the budget and monetary policy failed to boost market sentiments.

In terms of macros, the rupee got tantalisingly close to the ₹87/$ mark, but closed the week around ₹86.60/$. Clearly, the pressure on the rupee is not going away in a hurry. While the RBI intervention has kept the rupee in a range, FPI flows may start to come back. Brent Crude hovered around $75/bbl, with the impact of the US sanctions on Russia yet to manifest itself. Also, the pressures in the Middle East and West Asian routes are keeping oil prices steady around $75/bbl levels.

MACRO FPI FLOW PICTURE UP TO FEBRUARY 21, 2025

The table captures monthly FPI flows into equity and debt for last 4 calendar years.

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
Calendar 2024 (₹ Crore)	(1,21,210.21)	1,21,637.15	426.94	1,65,342.98	1,65,769.92
Jan-2025 (₹ Crore)	(81,903.72)	3,876.78	(78,026.94)	815.91	(77,211.03)
Feb-2025 (₹ Crore) #	(30,588.82)	6,879.08	(23,709.74)	1,788.31	(21,921.43)
Total for 2025 (₹ Crore)	(1,12,492.54)	10,755.86	(1,01,736.68)	2,604.22	(99,132.46)
For 2025 ($ Million)	(13,006.74)	1,239.59	(11,767.15)	286.45	(11,480.70)
# – Recent Data is up to February 21, 2025

Data Source: NSDL (Negative figures in brackets)

Year 2025 has surely begun on a deeply negative note with $(11,481) Million of net selling overall by FPIs. This includes $(11,767) Million of net selling in equities, partially offset by $286 Million of net buying in debt. The IPO action could hold the future to the market direction. Last week, we had  the mega IPO of Hexaware Ltd, which did attract a large number of global investors. There are more mega IPO issues on the anvil, although it must be said that even in the Hexaware case, the demand came entirely from the institutions; even as the retail, HNI and even the employee portion got undersubscribed.

FPI SENTIMENTS – THE WEEK THAT WAS

For the week to February 21, 2025, FPIs remained net sellers to the tune  of $(283) Million, sharply lower than previous weeks. Here is the week that was.

• The RBI MPC minutes were put out on Friday. Minutes showed that the RBI was, now, more concerned about reviving growth and giving a boost to capital formation, since the inflation was already under control at 4.22%. That has opened the doors for another cut.
• The US Fed minutes were also published on Wednesday this week, and the minutes showed rising concerns over inflation. The CME Fedwatch is already pegging just one more rate cut of 25 bps in 2025 and another rate cut of 25 bps in year 2026.
• India’s trade data for January 2025 showed the merchandise trade deficit had widened to $22.99 Billion on the back of weak exports. The month of January 2025 actually saw the services exports getting tantalizingly close to the merchandise exports
• Central government looks to increase the deposit insurance for bank depositors from the current ₹5 lakhs to ₹12 lakhs. The insurance cover had been recently raised from ₹2 lakh to ₹5 lakh after the Yes Bank fiasco. Deposits are insured by the DICGC.
• Liquidity continues to be the big challenge for the RBI. With advance tax season coming up in March, RBI is infusing $16 billion of liquidity into Indian markets. The government payments being routed directly through the RBI has also impacted liquidity.

Let us turn to the granular FPI flow story in last 4 weeks.

DAILY FPI EQUITY FLOWS FOR LAST 4 ROLLING WEEKS

Here is the last 4 rolling weeks data on FPI flows in rupee terms and in dollar terms.

Date	FPI Flow (₹ Crore)	Cumulative flows	FPI Flow($ Million)	Cumulative flows
27-Jan-25	-2,866.30	-2,866.30	-332.17	-332.17
28-Jan-25	-4,514.16	-7,380.46	-522.36	-854.53
29-Jan-25	-2,940.87	-10,321.33	-339.84	-1,194.37
30-Jan-25	-1,796.22	-12,117.55	-207.47	-1,401.84
31-Jan-25	-1,753.84	-13,871.39	-202.56	-1,604.40
03-Feb-25	-1.32	-13,872.71	-0.15	-1,604.55
04-Feb-25	-3,628.00	-17,500.71	-416.46	-2,021.01
05-Feb-25	1,029.43	-16,471.28	118.16	-1,902.85
06-Feb-25	-1,147.53	-17,618.81	-131.56	-2,034.41
07-Feb-25	-3,594.36	-21,213.17	-410.50	-2,444.91
10-Feb-25	-472.69	-21,685.86	-54.04	-2,498.95
11-Feb-25	-2,297.12	-23,982.98	-262.27	-2,761.22
12-Feb-25	-4,089.26	-28,072.24	-470.65	-3,231.87
13-Feb-25	-4,875.81	-32,948.05	-561.43	-3,793.30
14-Feb-25	-2,195.60	-35,143.65	-252.71	-4,046.01
17-Feb-25	-5,023.44	-40,167.09	-578.16	-4,624.17
18-Feb-25	-2,122.76	-42,289.85	-244.63	-4,868.80
19-Feb-25	0.00	-42,289.85	0.00	-4,868.80
20-Feb-25	8,216.28	-34,073.57	944.68	-3,924.12
21-Feb-25	-3,507.56	-37,581.13	-404.56	-4,328.68

Data Source: NSDL

• In last 7 rolling weeks, FPIs saw net outflows $(1,601) Million, $(841) Million, $(1,604) Million, $(2,283) Million, $(2,568) Million, $(2086) Million, and $(645) Million. In the week to February 21, 2025, net FPI equity outflows stood at $(283) Million.
• If you look at the last 4 rolling weeks on a cumulative basis, total net FPI outflows from equities were to the tune ₹(37,581) Crore or $(4,329) Million; with the broad trend still veering towards FPI sell-off.

The coming week will be the last week of February and it will see some critical data flows like US PCE inflation, US GDP, India Q3 GDP, India FY25 GDP second estimates, core sector growth, fiscal deficit update etc. The big focus would still be on the Trump tariff program!