Foreign Portfolio Investors Post 17-Month High Inflows of Rs 22,615 Crore in February

Foreign Portfolio Investors (FPIs) Inject Rs 22,615 Crore into Indian Equities

Key Highlights

• FPIs recorded the highest monthly inflow in 17 months, driven by the interim India-US trade deal, correction in domestic market valuations, and robust third-quarter corporate earnings.
• This marks a significant turnaround from three consecutive months of heavy selling, where FPIs withdrew Rs 35,962 crore, Rs 22,611 crore, and Rs 3,765 crore in January, December, and November, respectively.

Net Outflows in 2025

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• FPIs have withdrawn a net Rs 1.66 lakh crore (USD 18.9 billion) from Indian equities in 2025, making it one of the worst periods for foreign flows.
• The outflows were triggered by volatile currency movements, global trade tensions, concerns over potential US tariffs, and stretched equity valuations.

Investment Trends

• FPIs invested Rs 22,615 crore in February, the highest monthly inflow since September 2024, when they invested Rs 57,724 crore.
• The inflow was driven by secondary market buying, signaling renewed foreign confidence post-2025 outflows.
• Sectorally, FPIs were aggressive buyers in financials and capital goods, while continuing to pare exposure to the IT sector.

Market Outlook

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• Analysts expect March flows to remain positive, driven by improving earnings momentum, moderation in valuations, and early signs of easing trade uncertainty.
• Q4 earnings will determine whether 15% earnings growth in FY27 is achievable, while rupee stability below Rs 91 to the dollar provides comfort on returns.
• FPIs are likely to adopt a wait-and-watch approach before increasing exposure to emerging markets, but improving GDP growth prospects and a healthy corporate earnings outlook for FY27 bode well for medium-term flows.