Weekly Musings – FPI flows for week ended January 03, 2025

6 Jan 2025 , 09:47 AM

FPI OUTFLOWS CONTINUE IN THE WEEK

Even as the new year began, there was not much respite on FPI flows. For the week, the FPIs were net sellers to the tune of $645 Million, compared to $600 Million in the previous week. The intensity may have reduced but the flow is still outward, which is not surprising considering the way the rupee has weakened sharply. For the full year 2024, the FPI flows into equity were neutral with the secondary market outflows almost exactly offsetting the IPO inflows. Some of the big concerns for FPIs, at this juncture, would be the weakness in GDP, faltering capex spending, rising current account deficit, and the pressure on corporate results. In this scenario, the FPIs are, at best, likely to be neutral on Indian equities.

MACRO FPI FLOW PICTURE UP TO JANUARY 03, 2025

The table captures monthly FPI flows into equity and debt for last 4 calendar year viz., 2022, 2023, 2024, and 2025.

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) #	(4,309.93)	25.02	(4,284.91)	(5,805.40)	(10,090.31)
Total for 2025 (₹ Crore)	(4,309.93)	25.02	(4,284.91)	(5,805.40)	(10,090.31)
For 2025 ($ Million)	(503.65)	2.92	(500.73)	(677.85)	(1,178.58)
# – Recent Data is up to January 03, 2025

Data Source: NSDL (Negative figures in brackets)

For the just concluded calendar year 2024 it was a year of neutral flows into equities, with debt being the saving grace. Out of the total net FPI flows of ₹1,658 Billion in calendar 2024, FPI infusion in debt was ₹1,653 Billion (99.7%), while equities saw FPI inflows of just ₹4.30 Billion. In terms of FPI equity flows in 2024, the inflows from IPOs almost entirely offset the outflows from secondary markets. Year 2025 has begun on a cautious note with $1,179 Million of net selling overall by FPIs. This included $501 Million of net selling in equities and $678 Million of net selling in debt. However, these are early days still.

FPI SENTIMENTS – THE WEEK THAT WAS

For the week to January 03, 2025, FPIs remained net sellers to the tune  of $645 million, sharply higher than the last couple of weeks. Here is the week that was.

• The core sector growth for the month of November improved to 4.3%, the third consecutive month of improvement after the contraction in August. Cement led the way with 13% growth, followed by coal and steel output in that order.
• India met about 52.5% of its full year fiscal deficit by the end of November. With just 4 months to go, it looks like the centre should be able to defend the 4.9% fiscal deficit target as share of GDP. That is; if the centre does not decide on pump priming.
• With 8 months of fiscal data, the government capex is still 12% lower than the comparable period last year. The big question is whether the government will now push capex spending to revive GDP growth, even at the cost of higher fiscal deficit?
• Rupee stayed weak at ₹85.78/$ for the week, getting uncomfortably close to the ₹86/$ mark. The dollar index is at a 2-year high of 109.2 and China is weakening the Yuan. That is pressuring the rupee, despite the RBI consistently intervening by selling spot dollars.
• CLSA drops HDFC Bank from its India model portfolio, but adds Tata Motors, NTPC and Nestle India. CLSA sees an opportunity to go light on banking stocks and instead accumulate consumer plays that have corrected sharply from peak levels.
• SEBI announces mutual fund lite regulations to make the onboarding easier for pure passive funds and also reduce the compliance burden. It also plans to allow Private Equity funds and AIFs to also sponsor mutual funds in India.

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
09-Dec-24	-786.13	-786.13	-92.86	-92.86
10-Dec-24	599.78	-186.35	70.79	-22.07
11-Dec-24	1,867.12	1,680.77	220.04	197.97
12-Dec-24	194.75	1,875.52	22.96	220.93
13-Dec-24	-3,563.53	-1,688.01	-419.87	-198.94
16-Dec-24	2,936.51	1,248.50	346.12	147.18
17-Dec-24	189.10	1,437.60	22.29	169.47
18-Dec-24	-2,386.74	-949.14	-281.03	-111.56
19-Dec-24	-922.34	-1,871.48	-108.59	-220.15
20-Dec-24	-793.19	-2,664.67	-93.23	-313.38
23-Dec-24	-1,872.95	-4,537.62	-220.12	-533.50
24-Dec-24	155.40	-4,382.22	18.27	-515.23
25-Dec-24	0.00	-4,382.22	0.00	-515.23
26-Dec-24	-1,804.10	-6,186.32	-211.77	-727.00
27-Dec-24	-1,592.20	-7,778.52	-186.73	-913.73
30-Dec-24	370.17	-7,408.35	43.25	-870.48
31-Dec-24	-1,598.78	-9,007.13	-187.07	-1,057.55
01-Jan-25	-5,351.05	-14,358.18	-624.96	-1,682.51
02-Jan-25	-597.46	-14,955.64	-69.70	-1,752.21
03-Jan-25	1,663.60	-13,292.04	193.93	-1,558.28

Data Source: NSDL

• In last 7 rolling weeks, FPIs saw net outflows of $(600) Million, $(114) Million, $(199) Million; net inflows of $2,886 Million, $587 Million; net outflows of $(388) Million, and $(288) Million. In the week to January 03, 2025 net FPI equity outflows were to the tune of $(645) Million.
• If you look at the last 4 rolling weeks on a cumulative basis, total net FPI outflows from equities were to the tune ₹(13,292) Crore or $(1,558) Million; with the broad trend mixed.

The big data points that the FPIs will watch out this week will be the FOMC minutes, US unemployment data and the first estimates of India GDP!