FPI Outflows Hit $685 Million in Early November - IPOs Prevent Deeper Exit

After strong inflows of $1.65 billion in October, the first half of November 2025 swung sharply into negative territory. FPIs pulled out $685 million from Indian equities in just 15 days.

But here’s the twist - the number could have been much worse. The only reason the headline figure didn’t plunge deeper was because FPIs pumped $885 million into IPOs. Without these primary market inflows, India would have reported a massive $(1,570) million sell-off in the secondary market alone.

In short, IPOs saved the month.

IPOs Saved the Day

The first fortnight of November saw several large and high-demand IPOs including Orkla India, Lenskart, Groww, Pine Labs, and PhysicsWallah. FPIs participated heavily, offsetting aggressive selling in listed equities.

Here is how the math played out:

• Secondary market selling: $(1,570) million
• IPOs inflows: +$885 million
• Net FPI flow: $(685) million

Without the IPO pipeline, India would have reported one of the deepest early-month outflows in several quarters.

Macro Trends: AUC Still Far Below Peak

The broader foreign holdings picture tells a cautious story:

• Equity AUC: $837 billion
• Total AUC: $918.83 billion

These numbers remain well below the $1 trillion+ peak of September 2024. FPI ownership of Indian equities is still at multi-year lows, reflecting the ongoing “reallocation” theme.

The two major macro takeaways:

• FPIs continue to lighten secondary-market exposure.
• Debt flows are improving as a global rate-cut narrative strengthens.

Sector-Wise FPI Flow Breakdown

NSDL’s sectoral data for early November shows a clear polarization: a few sectors saw strong buying while many faced deep selling.

Data Source: NSDL

What the Sector Data Tells Us

1) Telecom Dominated Inflows

FPIs bought $1,061 million worth of telecom stocks - primarily because the Singtel stake sale was absorbed almost entirely by foreign investors.

2) Oil & Gas Saw Heavy Buying

At $337 million, this was the second-best sector for inflows. FPIs added to RIL and downstream players amid improving GRMs (gross refining margins).

3) Retail & Services: IPO Effect Prevented Bigger Selling

FPIs sold heavily in services and consumer-facing sectors, but IPO participation in Lenskart and PhysicsWallah softened the overall hit.

4) IT Took the Biggest Blow

With $(549) million of selling, IT was the largest negative sector. Weak global cues and mixed Q2 FY26 numbers led FPIs to continue reducing exposure.

5) FMCG & Consumer Services Under Pressure

Both sectors saw substantial selling because the loss of GST input tax credit increased cost pressures.

6) Tariff Uncertainty Still Hurting US-Linked Sectors

IT, healthcare, and chemicals continue to face FPI selling due to ongoing tariff risks and global trade uncertainty.

Globally, FPIs remain positioned as “Long Asia – Short India,” awaiting clarity on an Indo–US trade deal.

What This Means for Indian Markets

• IPOs continue to attract deep FPI participation - bullish for primary markets.
• Secondary market selling shows global caution on India despite strong domestic fundamentals.
• Debt inflows improving suggests shifting expectations toward rate cuts.
• Sector rotation remains aggressive: telecom & O&G up; IT, FMCG, and consumer services down.
• Any easing of US-India trade tensions could quickly shift foreign sentiment.

Key Takeaways

• FPIs recorded $685 million outflows in early November 2025.
• IPOs contributed $885 million inflows, preventing deeper selling.
• Telecom and Oil & Gas were major gainers; IT saw the largest outflows.
• AUC remains below peak, reflecting cautious foreign positioning.
• Macro sentiment hinges on tariff clarity and a potential Indo-US trade breakthrough.

Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice. Market data and sectoral trends discussed here are meant for awareness only. Please do your own research before making investment decisions.