FPI Flows in October 2025: Net Buyers Return, But the Real Story Lies Beneath

If there’s one number that can lift Dalal Street’s mood, it’s this - foreign portfolio investors (FPIs) turned net buyers in the first half of October 2025, pumping in $413 million into Indian equities. It’s not a blockbuster figure, but after months of outflows, even a trickle feels like a breeze. The question is - is this the start of a trend or just an IPO-driven blip?

What Are FPI Flows and Why They Matter

Foreign Portfolio Investors (FPIs) are global funds and institutions that invest in Indian stocks and bonds. Their actions can make or break short-term market sentiment. When FPIs buy, liquidity surges; when they sell, volatility creeps in. That’s why tracking FPI flows offers a real-time pulse of how global money views India’s growth story.

The Big Picture - October 2025 So Far

According to NSDL data, FPIs infused around $413 million into Indian equities during the first fortnight of October 2025. The bulk of these inflows came from the Tata Capital IPO, which saw robust anchor and QIB participation. Excluding IPO money, FPIs remained net sellers in the secondary market - a reminder that asset allocation, not euphoria, drives institutional behaviour.

Here’s a quick look at how the money moved:

Data Source: NSDL

What’s Driving the Inflows

1. BFSI leads the pack: The financial services sector alone attracted $937 million, fuelled largely by the Tata Capital IPO. Beyond IPOs, banks and NBFCs remain a favourite because they mirror the strength of India’s consumption and credit cycle.

2. Autos ride the festive wave: With festivals around the corner and lower GST rates boosting affordability, automobile stocks found favour. FPIs see India’s four-wheeler and EV segments as structural plays.

3. Metals and Power gain traction: Anticipation of supply curbs in China and India’s continued push for infrastructure kept metals, mining, and power names in demand.

Where the Selling Continued

1. FMCG feels the slowdown: The sharpest sell-off came in FMCG stocks (-$339 million). Concerns over sluggish rural recovery and muted urban spending seem to be weighing on investor confidence.

2. IT and Healthcare face global headwinds: Both sectors, heavily exposed to US markets, saw heavy selling (-$218 million and -$310 million respectively) amid tariff uncertainties and weak tech spending abroad.

3. Real Estate and Capital Goods ease off: FPIs trimmed positions here too, possibly booking profits after a strong run in recent quarters.

Reading Between the Lines

The overall equity assets under custody (AUC) of FPIs stood at $823.27 billion, still below the September 2024 peak. It’s a reminder that global funds are yet to return in full force. For now, FPIs are rotating capital - from global exposure to domestic-oriented themes that feel safer amid tariff and geopolitical uncertainty.

IPO momentum also matters. With the big listings slowing down in the second half of October, the next set of FPI numbers will reveal whether this rebound is sustainable or simply IPO-driven liquidity at work.

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Key Takeaways

• FPIs turned net buyers in the first half of October 2025 with inflows of $413 million.
• BFSI dominated inflows, led by the Tata Capital IPO.
• FMCG, IT, and Healthcare sectors saw sharp outflows.
• FPIs are favouring domestic stories like banks, autos, and infrastructure over export-driven sectors.
• With IPOs slowing, the sustainability of inflows will be tested in the second half of October.

For now, the message is clear - foreign money is cautiously betting on India’s home-grown growth story.

Disclaimer: This article is for educational and informational purposes only. It should not be considered investment advice or a recommendation to buy or sell any securities.