Foreign Portfolio Investors Re-enter Indian Equities with Rs 16,621 Crore Investment in August
Foreign portfolio investors (FPIs) resumed their buying spree in Indian equities, investing Rs 16,621 crore during the first half of August. This influx follows a positive trend in corporate earnings and expectations of lower interest rates in the United States. The recent investments come after FPIs had poured Rs 20,200 crore into Indian equities in July, marking a significant turnaround from earlier selling trends.
Prior to this resurgence, FPIs had experienced a four-month selling streak, withdrawing a total of Rs 2.4 lakh crore from Indian equities this year. This figure surpasses the Rs 1.66 lakh crore pulled out throughout 2025. The selling peaked in March with Rs 1.17 lakh crore withdrawn, followed by Rs 60,847 crore in April, Rs 32,963 crore in May, and Rs 49,340 crore in June.
Experts attribute the renewed interest from foreign investors to several factors. These include improved valuations compared to other markets, steady corporate earnings, and expectations of US rate cuts. Additionally, lower crude prices and reduced currency volatility have made Indian equities more appealing. Manish Bhandari, CEO of Vallum Capital, noted that the shift in sentiment reflects a diversification away from crowded markets like Korea and Taiwan, particularly in the AI sector.
The buying trend among FPIs has become more selective, with a focus on sectors tied to domestic consumption. Vedant Gupte, Co-Founder and CEO of Trackk, highlighted that consumer durables and healthcare are attracting significant interest. He emphasized that foreign investors are increasingly underwriting the Indian household rather than just focusing on corporate invoices.
July’s sectoral data supports this trend, showing strong FPI buying in Consumer Services, Healthcare, Consumer Durables, Metals & Mining, and IT. However, some sectors continued to experience net selling. The ongoing buying pattern may be sensitive to global market conditions, with foreign investor flows expected to react to US treasury yields, the dollar index, and crude oil prices. Pabitro Mukherjee from Bajaj Broking pointed out that crude oil prices and geopolitical developments, particularly related to the US-Iran situation, will be crucial for investors in the upcoming week.
In addition to equities, FPIs have also invested in debt, contributing Rs 972 crore through the Fully Accessible Route (FAR) and another Rs 69 crore through the general route.
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