FPIs invested Rs 22,615 crore in February, the highest in 17 months, after months of heavy selling. |
Mumbai: Foreign Portfolio Investors (FPIs) invested Rs 22,615 crore in Indian stock markets in February. This is the highest monthly inflow in the last 17 months. The data was released by market depositories.
The strong buying came after three months of heavy selling. FPIs had pulled out Rs 35,962 crore in January, Rs 22,611 crore in December and Rs 3,765 crore in November.
Despite February’s inflow, FPIs have withdrawn a total of Rs 1.66 lakh crore (about USD 18.9 billion) from Indian equities so far in 2025. This makes it one of the toughest periods for foreign investments in recent years.
Why Did FPIs Return?
Experts say several reasons supported the February inflow.
First, the interim trade agreement between India and the US improved investor confidence. Second, Indian stock market valuations corrected from earlier high levels, making shares more attractive. Third, companies reported strong third-quarter earnings.
According to Javed Khan of Angel One Ltd, India’s Q3 FY26 earnings grew 14.7 per cent. This strengthened the belief that India’s growth story remains strong.
Varun Gupta of Groww Mutual Fund also said improving earnings and easing trade tensions supported foreign buying.
Sector-Wise Trend
FPIs mainly bought stocks in financial services and capital goods sectors. However, they continued to sell IT stocks.
The IT sector saw outflows of Rs 10,956 crore. Investors are worried about artificial intelligence (AI) disruption and global weakness in technology spending.
VK Vijayakumar of Geojit Investments said FPIs had sold heavily in IT stocks but turned buyers in financial and capital goods companies.
What Lies Ahead?
Market experts believe FPI flows in March may remain positive. Stable rupee levels below Rs 91 per dollar are also giving comfort to investors.
However, global factors such as trade tensions and the ongoing Middle East conflict remain key risks. Changes in crude oil prices and currency movements will be closely watched.
Overall, improving GDP growth and strong corporate earnings outlook for FY27 are expected to support foreign investment in the medium term.
