Foreign institutional investors (FIIs) have made a notable return to Indian equities in March, marking the first net inflows after two consecutive months of outflows. According to provisional data from the NSE, FIIs recorded net purchases of over ₹11,000 crore as of March 27, following the Nifty index rebalancing.
Till March 26, FIIs had remained net sellers to the tune of ₹67 crore, as per NSDL data. However, inflows surged following passive buying triggered by changes in the Nifty index. This is the first time since December 2023 that monthly net inflows have crossed ₹11,000 crore, signalling a potential turnaround in sentiment.
During the first half of March, FIIs were net sellers of more than ₹22,000 crore, making the reversal particularly significant.
Several factors have contributed to the recent FII interest in Indian equities:
Since the end of September 2024, FIIs had consistently sold Indian equities, citing elevated valuations, moderate earnings growth, and macroeconomic concerns. Between October 2024 and February 2025, FIIs pulled out approximately ₹2.19 lakh crore from Indian markets.
The renewed buying in March comes as a break in this trend, offering a potential signal of stabilisation in global investor sentiment towards India.
With net inflows exceeding ₹11,000 crore in March, FIIs have shown renewed confidence in Indian equities following months of heavy selling. While passive flows from index rebalancing played a key role, supportive macro factors and improved valuations may help sustain the momentum going forward.
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Published on: Mar 28, 2025, 7:28 PM IST
Akshay Shivalkar
Akshay Shivalkar is a financial content specialist who strategises and creates SEO-optimised content on the stock market, mutual funds, and other investment products. With experience in fintech and asset management, he simplifies complex financial concepts to help investors make informed decisions through his writing.
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