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| Photo Credit:
Andrii Yalanskyi

Foreign investors have injected ₹4,223 crore in the country’s equity market in April as they turned net buyers for the first time in three months amid a blend of favourable global cues and robust domestic fundamentals.

The inflow of foreign capital came last month following a back-to-back net outflow of ₹3,973 crore in March, ₹34,574 crore in February and ₹78,027 crore in January.

Going ahead, FPI inflows could remain stable, but will be constrained by the modest earnings growth of around 5 per cent in FY25, V K Vijayakumar, Chief Investment Strategist, Geojit Investments, said.

According to the data with the depositories, FPIs made a net investment of ₹4,223 crore in equities in the entire April.

The latest flow has helped in narrowing the outflow to ₹1.12 lakh crore in 2025 so far.

Equity markets witnessed a sharp resurgence in FPI activity in April, signalling a marked reversal from the outflows seen earlier this year.

“This renewed momentum was underpinned by a blend of favourable global cues and robust domestic fundamentals that bolstered investor confidence,” Himanshu Srivastava, Associate director – Manager Research, Morningstar Investment, said.

One of the key catalysts behind this trend has been the improving outlook for a potential US-India trade agreement. Additionally, the weakening of the US dollar, alongside a strengthening Indian rupee enhanced the appeal of Indian assets to global investors, he said.

Furthermore, upbeat quarterly earnings from prominent Indian corporates added to the positive sentiment, he added.

Trend reversal

Vijayakumar of Geojit Investments attributed two major factors behind this reversal of FPI strategy. Firstly, President Donald Trump’s announcement of a 90-day pause on implementation of reciprocal tariffs led to a recovery in global equity markets.

“Secondly, the weakness in the dollar halted and reversed the momentum trade towards US that was witnessed after Trump’s victory in the elections. The steep decline in the dollar index from 111 on January 11 to 99 recently facilitated FPIs inflows to emerging markets, particularly India,” he added.

On the other hand, FPIs took out ₹13,314 crore from debt general limit and withdrew ₹5,649 crore from debt voluntary retention route during the period under review.

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Published on May 4, 2025