Foreign Investors Infuse Nearly ₹31,000 Crore in Indian Equities Amid Positive Sentiment

Foreign investors have pumped nearly ₹31,000 crore into Indian equity markets in the last six trading sessions of March, driven by attractive valuations, the appreciation of the rupee, and improved macroeconomic indicators.

This influx has been a key factor in the market’s recovery, contributing to a 6% surge in the benchmark Nifty index, which reflects a renewed sense of confidence among investors.

FPI Inflows Drive 6% Recovery in Nifty

The re-emergence of Foreign Portfolio Investors (FPIs) as net buyers has played a crucial role in stabilizing the markets after a period of heavy outflows.

The recent inflows helped reduce the total outflow for March to ₹3,973 crore, according to data from the depositories. This marks a significant improvement compared to previous months when FPIs had withdrawn ₹34,574 crore in February and ₹78,027 crore in January.

March’s Inflows: A Boost for the Market

Despite the overall outflow in March, the last six trading sessions—from March 21 to March 28—saw FPIs infuse ₹30,927 crore into Indian equities, which has played a key role in lifting market sentiment.

The positive movements in the markets have largely been attributed to the resurgence of foreign investment, which has provided a much-needed boost to investor confidence.

Fluctuating FPI Flows in FY 2024-25

However, when examining the broader trend for India’s equity markets in the financial year 2024-25, the picture shows significant fluctuations in FPI flows. Initially, FPIs were net buyers, drawn by India’s strong economic growth and favourable market conditions.

This trend, however, reversed in October 2024, when a sharp shift occurred, with FPIs pulling out substantial investments.

Record Outflows in FY 2024-25

The total outflow from FPIs during the financial year 2024-25 (from April 1, 2024, to March 27, 2025) stands at approximately USD 15 billion, marking the highest-ever recorded outflow.

This exodus of foreign investments led to a significant decline in the Indian equity markets from their late-September peak, highlighting the volatility in FPI sentiment during the period.

Conclusion 

The recent ₹31,000 crore influx from foreign investors has bolstered market sentiment and contributed to a 6% recovery in Nifty.

However, the broader trend for FY 2024-25 shows significant fluctuations, with a record ₹15 billion outflow.

While foreign investments have provided a temporary boost, the market remains vulnerable to ongoing shifts in FPI sentiment and global factors.

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