Weekly Musings – FPI flows for week ended January 10, 2025

13 Jan 2025 , 01:30 PM

FPI OUTFLOWS INTENSIFY DURING THE WEEK

There was no relenting on FPI outflows; as it just intensified in the latest week to January 10, 2024. After FPI selling of $645 Million and $600 Million in equities in the previous 2 weeks; the latest week to 10-Jan saw intense FPI selling to the tune of $2,086 Million, with heavy selling on all the trading sessions. Apart from the growth concerns (highlighted by the Q2-GDP and the First Advance Estimates of FY25 GDP), and persistently high inflation; FPIs are also concerned about the free fall in the Indian rupee, which erodes their dollar returns. Also, India may still look reasonably priced at 22-23 times earnings; but as many FPI top brass admit, “what is good is not reasonable, and what is reasonable is not good.” That, perhaps, best sums up the caution and trepidation of FPIs, when it comes to making fresh allocations to Indian equities. For now, the FPI selling is also weighing on debt flows.

MACRO FPI FLOW PICTURE UP TO JANUARY 10, 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) #	(22,259.88)	66.12	(22,193.76)	(14,380.95)	(36,574.71)
Total for 2025 (₹ Crore)	(22,259.88)	66.12	(22,193.76)	(14,380.95)	(36,574.71)
For 2025 ($ Million)	(2,594.89)	7.71	(2,587.18)	(1,676.87)	(4,264.05)
# – Recent Data is up to January 10, 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. 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 very cautious note with $4,264 Million of net selling overall by FPIs. This included $2,587 Million of net selling in equities and $1,677 Million of net selling in debt. However, these are early days still and the picture of FPI allocation to Indian equities for 2025 is still not too clear.

FPI SENTIMENTS – THE WEEK THAT WAS

For the week to January 10, 2025, FPIs remained net sellers to the tune  of $(2,086) million, sharply higher than the last three weeks combined. Here is the week that was.

• The first advance estimate (FAE) of GDP for FY25 has been pegged sharply lower at 6.4%, compared to 8.2% achieved in FY24. However, with 6.7% and 5.4% GDP growth achieved in Q1 and Q2, the MOSPI is still quite aggressive about growth hopes in H2-FY25.
• US Fed published the minutes of the 18-Dec meeting. The FOMC members have expressed concerns on inflation, especially in the light of the likely tariff hikes and immigration checks announced by Trump. CME Fedwatch is pegging 1 rate cut in 2025.
• The Index of Industrial Production (IIP) for November 2024 came in sharply higher at 5.17%. This growth was largely driven by manufacturing and electricity, even as mining output remained subdued. FY25 IIP at 4.1% would be lower than previous years.
• US unemployment rate has fallen further to 4.1%, after touching a peak of 4.3% in August. Also, the payroll addition sat 2,56,000 is also at a healthy level and does away with any concerns about hard landing that existed in the last few months.
• Rupee weakened further to ₹86.20/$ for the week, amidst dollar index hardening and FPI selling. China is also weakening the Yuan. That is, once again, pressuring the rupee, despite the RBI intervening on and off by selling spot dollars.
• The Q3 results season began with TCS declaring stellar numbers, albeit below estimates. YOY profits were up 11.9% and revenues were up 5.6%. However, constant currency (CC) revenues on a sequential basis was down -1.7%; but TCV was robust in Q3FY25.
• Year 2024 has seen robust demat account additions, even on a high base. A total of 4.6 crore fresh demat accounts in 2024, taking the total tally to 18.5 crore accounts. The demat accounts have growth nearly 4.5 times since the COVID pandemic.

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
16-Dec-24	2,936.51	2,936.51	346.12	346.12
17-Dec-24	189.10	3,125.61	22.29	368.41
18-Dec-24	-2,386.74	738.87	-281.03	87.38
19-Dec-24	-922.34	-183.47	-108.59	-21.21
20-Dec-24	-793.19	-976.66	-93.23	-114.44
23-Dec-24	-1,872.95	-2,849.61	-220.12	-334.56
24-Dec-24	155.40	-2,694.21	18.27	-316.29
25-Dec-24	0.00	-2,694.21	0.00	-316.29
26-Dec-24	-1,804.10	-4,498.31	-211.77	-528.06
27-Dec-24	-1,592.20	-6,090.51	-186.73	-714.79
30-Dec-24	370.17	-5,720.34	43.25	-671.54
31-Dec-24	-1,598.78	-7,319.12	-187.07	-858.61
01-Jan-25	-5,351.05	-12,670.17	-624.96	-1,483.57
02-Jan-25	-597.46	-13,267.63	-69.70	-1,553.27
03-Jan-25	1,663.60	-11,604.03	193.93	-1,359.34
06-Jan-25	-2,874.85	-14,478.88	-335.22	-1,694.56
07-Jan-25	-3,055.16	-17,534.04	-355.96	-2,050.52
08-Jan-25	-1,220.16	-18,754.20	-142.34	-2,192.86
09-Jan-25	-3,729.30	-22,483.50	-434.43	-2,627.29
10-Jan-25	-7,029.38	-29,512.88	-818.50	-3,445.79

Data Source: NSDL

• In last 7 rolling weeks, FPIs saw net outflows of $(645) Million, $(600) Million, $(114) Million, $(199) Million; net inflows of $2,886 Million, $587 Million; and net outflows of $(388) Million. In the week to January 10, 2025 net FPI equity outflows were to the tune of $(2,086) Million.
• If you look at the last 4 rolling weeks on a cumulative basis, total net FPI outflows from equities were to the tune ₹(29,513) Crore or $(3,446) Million; with the broad trend still veering towards FPI sell-off.

The big data points that the FPIs will watch out next week will be India inflation, US inflation, India trade deficit and the signals coming from various Fed member speeches.