FPIs Turn Net Buyers in April 2025: Sector - Wise Inflows & Outflows

Foreign Portfolio Investors (FPIs) reversed their trend and turned net buyers in April 2025, marking the first month of positive net equity inflows in the calendar year. After a turbulent Q1 marred by aggressive sell-offs, April witnessed a welcome shift in investor sentiment, despite a rocky start to the month.

April 2025 FPI Summary: $528 Million in Net Equity Inflows

Foreign investors bought Indian equities worth $528 million in April 2025. This turnaround is notable after net outflows of $13 billion combined in January and February, and a modest $402 million net outflow in March. Despite $3.96 billion in outflows during the first fortnight of April, FPIs made a strong comeback with $4.49 billion in inflows in the latter half of the month.

Sector-Wise FPI Flows – April 2025

What Drove the Rebound in FPI Flows in April 2025?

Several key macroeconomic and policy factors fueled the FPI shift:

1. Tariff De-escalation: The 90-day deferral of reciprocal tariffs eased short-term global trade tensions, boosting investor confidence in emerging markets like India.

2. Cooling Inflation: India’s March 2025 CPI inflation stood at 3.34%, aligning with market expectations. Coupled with normal monsoon forecasts by both IMD and Skymet, the outlook for food inflation appears stable.

3. Accommodative RBI Policy: The RBI cut rates for the second time in 2025 and signaled a possible third cut in June, making Indian equities more attractive relative to debt instruments.

4. Corporate Earnings Stability: While Q4 FY24 earnings were expected to be under pressure, most results met market expectations, supporting sentiment in sectors like BFSI and telecom.

Sectoral Outlook: Who Gained and Who Lost?

• Gainers:

  • BFSI (Banking, Financial Services & Insurance) remained the top pick, benefitting from its deep linkage to India’s macroeconomic growth and lower global exposure.

  • Telecom, FMCG, and Consumer Services saw renewed interest, indicating recovery in urban demand, digital consumption, and the resilience of domestic-centric sectors.

• Losers:

  • IT stocks faced persistent selling due to weak forward guidance and uncertainty over enterprise tech spending in the West.

  • Metals & Mining struggled amid an uneven Chinese recovery.

  • Autos and Construction took a hit from lingering concerns over import tariffs and margin pressures.

May 2025 Outlook: Geopolitical Risks in Focus

While April’s rebound is encouraging, mounting geopolitical tensions and a tense border situation may impact foreign flows in May. With global volatility on the rise, investor caution is likely to persist.

Conclusion

The return of FPIs to Indian equities in April 2025 is a promising signal, driven by stabilizing inflation, monetary easing, and a brief tariff truce. However, future flows will depend on how macroeconomic and geopolitical developments unfold in the coming months.