Weekly Musings – FPI flows for week ended May 23, 2025

26 May 2025 , 09:37 AM

GLOBAL BOND VOLATILITY TRIGGERS NET FPI SELLING

After 5 consecutive weeks of net buying, FPIs were net sellers worth $(560) million in equities this week. In last 5 weeks, FPIs had infused $6.40 Billion in. On 21-May, FPIs sold $(1,175) Million in Indian equities amidst global bond volatility. The risk of Israel bombing Iranian nuclear facilities added a new dimension to risk; elevating VIX to 17.28 levels.

The dollar index (DXY) weakened to 99.10, allowing the Indian rupee to harden from ₹86.08/$ to ₹85.17/$ this week. Reports of Israel possibly bombing Iranian nuclear facilities kept Brent Crude elevated around $65-66/bbl. That kept USDINR under pressure. It looks like RBI will again cut 25 bps in June policy, but core inflation may weigh beyond that.

MACRO FPI FLOW PICTURE UP TO MAY 23, 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)	(41,748.97)	7,174.62	(34,574.35)	10,273.72	(24,300.63)
Mar-2025 (₹ Crore)	(6,027.77)	2,055.16	(3,972.61)	36,953.97	32,981.36
Apr-2025 (₹ Crore)	3,243.03	980.28	4,223.31	(24,413.24)	(20,189.93)
May-2025 (₹ Crore) #	12,819.06	1,016.40	13,835.46	(13,077.77)	757.69
Total for 2025 (₹ Crore)	(1,13,618.37)	15,103.24	(98,515.13)	10,552.59	(87,962.54)
For 2025 ($ Million)	(13,017.54)	1,745.27	(11,272.27)	1,128.02	(10,144.25)
# – Recent Data is up to May 23, 2025

Data Source: NSDL (Net Outflows in brackets)

Year 2025 has started on a negative note with $(10,144) Million of overall net selling by FPIs; with pressure coming from debt. This comprised $(11,272) Million of net selling in equities, offset by $1,128 Million of net buying in debt. It was a volatile week of FPI flows, amidst global bond market tumult. After selling ₹(24,413) Crore in debt in April 2025 on narrowing of Indo-US yield spreads; FPIs were net sellers in debt worth ₹(13,078) Crore in May 2025.

FPI SENTIMENTS – THE WEEK THAT WAS

For the week to May 23, 2025, FPIs were net sellers in equities to the tune  of $(560) Million. Here is the week that was.

• Core sector growth for April 2025 tapered to 0.49%, as Refinery Products, with over 28% weight in the core basket, contracted -4.25%. Barring electricity, all other sectors either saw contraction or tepid growth in April, as capex questions re-emerged.
• RBI announced transfer of ₹2.69 trillion dividend for fiscal 2024-25, which constitutes revenues for the government for fiscal 2025-26. The dividend is lower than expected, because contingent risk buffer (CRB) was raised from 6.5% to 7.5%.
• Markets are betting on a mini-trade deal between the US. However, recent actions by the US like the remittance tax, ban on foreign students at Harvard University, and blatant supported to Pakistan have not been too encouraging.
• Trump threatens Apple with 25% tariffs if they produce Apple phones in India and sell in the US. Today, India is the second largest manufacturing base for Apple, after China, and accounts for 20% of total iPhone output. This challenges Economics 101.
• IPOs appear to be back in favour after a long gap. This week, Belrise IPO got subscribed 43 times. In the coming week, a total of 4 mainboard IPOs are expected to raise ₹6,688 Crore, with Leela Hotels being the largest IPO, raising ₹3,500 crore.
• Rate cuts may face an inflation hurdle. Raphael Bostic of the Fed hinted that the US may restrict itself to just 1 rate cut in 2025. In India, economists expect RBI to pause after the June rate cut. It looks like core inflation could spike due to rising gold prices.

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
28-Apr-25	5,040.37	5,040.37	588.98	588.98
29-Apr-25	2,509.65	7,550.02	294.57	883.55
30-Apr-25	2,351.23	9,901.25	275.97	1,159.52
01-May-25	0.00	9,901.25	0.00	1,159.52
02-May-25	173.39	10,074.64	20.39	1,179.91
05-May-25	2,806.51	12,881.15	334.68	1,514.59
06-May-25	1,796.13	14,677.28	213.23	1,727.82
07-May-25	4,011.45	18,688.73	474.48	2,202.30
08-May-25	2,951.95	21,640.68	349.05	2,551.35
09-May-25	2,427.20	24,067.88	286.01	2,837.36
12-May-25	0.00	24,067.88	0.00	2,837.36
13-May-25	-2,388.23	21,679.65	-278.85	2,558.51
14-May-25	164.30	21,843.95	19.35	2,577.86
15-May-25	930.55	22,774.50	109.09	2,686.95
16-May-25	5,746.53	28,521.03	671.42	3,358.37
19-May-25	7,483.41	36,004.44	874.57	4,232.94
20-May-25	937.83	36,942.27	109.69	4,342.63
21-May-25	-10,041.38	26,900.89	-1,175.01	3,167.62
22-May-25	2,272.24	29,173.13	265.59	3,433.21
23-May-25	-5,436.42	23,736.71	-634.61	2,798.60

Data Source: NSDL

• In previous 7 rolling weeks, FPIs saw net inflows of $521 Million, $1,658 Million, $1,180 Million, $2,040 Million, $990 Million; net outflows of $(2,470) Million, and $(1,210) Million. The week to May 23, 2025, saw FPIs net selling equities worth $(560) Million.
• In last 4 rolling weeks, total net FPI inflows into equities were to the tune ₹23,737 Crore or $2,799 Million; with flows positive, but tapering amidst geopolitical risks.

There are 5 key data points to watch next week; including India April IIP, Q4 & FY25 GDP growth, FY25 fiscal deficit, US Fed minutes, and US PCE inflation. Of course, FPIs will also be watching the India border situation and the relationships between Iran and Israel.