FPIs favour IPOs again, pump $1.3 billion into primary market in November

ET Intelligence Group: Foreign portfolio investors (FPIs) continued to show higher interest in the domestic primary market in November compared with the secondary market for the fifth consecutive month amid a sustained flow of IPOs. They invested net $1.3 billion (₹11,894.7 crore) in the primary market, their highest investment in four months. In addition, they once again turned net sellers in the secondary market, reporting an outflow of $1.8 billion (₹15,659.3 crore) after buying equities worth $448.1 million in the previous month. Considering net flows in the primary and secondary markets together, FPIs were net sellers of $424 million (₹3,764.6 crore) worth of Indian equities in November.

For the first 11 months of 2025, foreign investors were net sellers of $16.4 billion (₹1.4 lakh crore) of Indian equities including primary and secondary markets. FPIs have sold aggressively in the domestic market in 2025 so far compared with an outflow of $1.7 billion (₹15,019.6 crore) in the corresponding period of the previous year. Moreover, they had turned to be net buyers last year as a whole with a modest purchase worth $124 million (₹427 crore), driven by their focus on the primary market where they invested net $14.5 billion (₹1.2 lakh crore). In the current year so far, they have invested $7.6 billion (₹66,187 crore) in the primary market notwithstanding their heavy selling worth $24 billion (₹2.1 lakh crore) in the secondary market, which has far exceeded the $14.3 billion worth of selling in the whole of 2024.

The domestic mutual funds continued to offset the FPI outflow by increasing the extent of equity investments in November. The local mutual funds bought ₹38,173.8 crore worth of equities in November till 26th. This year so far, they have invested ₹4.5 lakh crore in equities, exceeding ₹4.3lakh crore invested in the whole of the previous year.

For December, the better than expected growth in the gross domestic product (GDP), corporate earnings expectation for the third quarter and any progress on the US tariff front will be crucial factors for the FPI fund flow. In addition, their activity will likely be limited owing to the holiday season in the second half of the month.