FPIs offload stocks worth Rs 81,000 crore in January, DFIs buy up bulk to stabilize D-Street

ET Intelligence Group: Foreign portfolio investors (FPIs) intensified selling in the secondary equity market in the first month of the current calendar year after showing a deceleration in the previous two months. Domestic funds, on the other hand, went on a buying spree during the month offsetting the FPI outflow and making it the second-highest monthly investment after the record buying last October.

At ₹81,903.7 crore ($9,491.6 million), FPI outflow in January was the highest since last October which recorded the highest monthly outflow of ₹1.1 lakh crore ($13,556 million), according to data from NSDL. In the primary market, net investment by FPIs slowed to ₹3,877 crore ($448.7 million), the lowest in seven months owing to slower activity in the IPO segment during January amid weakness in the broader market.

The net total FPI outflow in Indian equities including primary (IPOs, qualified institutional buying) and secondary routes was at ₹78,027 crore ($9,043 million) in January. In the first 10 months of FY25, FPIs were net sellers of Indian equities with an outflow of ₹88,500.7 crore ($10,252 million). In comparison, FPIs were net buyers of ₹1.7 lakh crore ($20,847 million) worth of Indian equities in the corresponding period of the previous fiscal year.

This reflects the cautious stance of foreign investors on the equity market in Asia's third-largest economy, especially beginning from the third quarter of the current fiscal year amid slowing domestic GDP growth, rising inflation, delay in interest rate cuts, and uncertainty about geopolitical and tariff-related stance by the Trump administration in the US.

Domestic mutual funds continued to take a positive position in the Indian equity market in January helped by sustained retail participation.

They invested a net ₹57,529 crore as of January 29, the highest in three months, according to the data from Sebi. This was the second-highest monthly investment by local mutual funds after the ₹90,771 crore invested in October to counter the heightened selling by FPIs during the month.

In December, equity inflow through the systematic investment plan (SIP) route hit a record ₹26,459 crore while the number of SIP accounts touched a new high of 103 million.