IPO rush keeps FPIs busy in primary market in November, outflow continues in secondary market

Foreign portfolio investors (FPIs) showed a sustained interest in the primary market in November 2024 while moderating the extent of selling in the secondary market compared with the previous month. According to the data from NSDL, they invested $2,098.4 million (Rs17,704 crore) in the Indian primary market through IPOs and QIBs. This followed the three-year high monthly investment of $2,361 million (Rs19.841.9 crore) in the previous month.

In 2024 so far, FPIs have invested $12,373.9 million (Rs1,03,601 crore) through the primary route, far outpacing $5,242.1 million (Rs 43,347.1 crore) that they had pumped in the whole of 2023. Their higher engagement in the primary market owes to the rising activity in the IPO segment in the current year. As many as 79 mainboard IPOs have together raised nearly Rs 1.4 lakh crore so far in 2024, the highest in any year.

In the secondary market, FPIs continued to sell equities but at a much slower pace compared with the previous month. They sold equities worth $4,661.6 million (Rs 39,315.8 crore) in November in the secondary market compared with the record monthly selling of $13,556.9 million (Rs1.1 lakh crore) in October. In 2024 so far, FPIs have sold equities worth $14,078.2 million (Rs1,18,620.6 crore). This compares with an inflow of $15,500.8 million (Rs1,27,759.8 crore) in 2023.

Considering both primary and secondary flows, FPIs pulled out $2,563.2 million (Rs21,611.8 crore) in November. Their total outflow in 2024 so far is $1,704.4 million (Rs15,019.6 crore). In 2023, they had invested $20,742.9 million (Rs1,71,106.9 crore).

In tandem with receding outflow from FPIs, domestic funds tapered their inflow in equities. They invested net Rs28,213.4 crore in November compared with a record inflow of Rs90,771 crore in the previous month.

The broader market is expected to show choppiness in December considering the seven-quarter low GDP growth for the September quarter at 5.4%, RBI’s policy meeting in the first week of the month, inflationary trend, and the ensuing holiday season.