Weekly Musings – FPI flows for week ended February 28, 2025

3 Mar 2025 , 09:32 AM

FPIS STAY NET SELLERS IN TRUNCATED WEEK

After a week of subdued selling in the previous week, the FPIs were back to selling $1.25 Billion in equities, despite this being a truncated week. FPIs continued to be net sellers on 3 out of the 4 trading sessions. This does mark the thirteenth consecutive week of net selling by FPIs, who have sold more than $13 Billion in Indian equities in the first two months of 2025. GDP data was favourable, but the markets did not really care.

In terms of macros, the rupee continued to hover around ₹87.50/$ mark, and closely relatively weaker in the week as dollar buying escalated from hedgers. Clearly, the pressure on the rupee is not going away in a hurry. While the RBI intervention has kept the rupee in a range, FPI outflows and China action is impacting FPI flows. Brent Crude fell to $72/bbl. With the US-Ukraine sanctions breaking down, markets expect Russian oil to be back in the market, and that would put pressure on the prices; pushing it even below $70/bbl.

MACRO FPI FLOW PICTURE UP TO FEBRUARY 28, 2025

The table captures monthly FPI flows into equity and debt for last 4 calendar years.

Calendar Month	FPI Flows Secondary	FPI Flows Primary	FPI Flows Equity	FPI Flows Debt/Hybrid	Overall FPI Flows
Calendar 2022 (₹ Crore)	(146,048.38)	24,608.94	(121,439.44)	(11,375.78)	(132,815.22)
Calendar 2023 (₹ Crore)	1,27,759.75	43,347.14	1,71,106.89	65,954.38	2,37,061.27
Calendar 2024 (₹ Crore)	(1,21,210.21)	1,21,637.15	426.94	1,65,342.98	1,65,769.92
Jan-2025 (₹ Crore)	(81,903.72)	3,876.78	(78,026.94)	815.91	(77,211.03)
Feb-2025 (₹ Crore) #	(41,748.97)	7,174.62	(34,574.35)	10,273.72	(24,300.63)
Total for 2025 (₹ Crore)	(1,23,652.69)	11,051.40	(1,12,609.21)	11,097.55	(1,01,511.66)
For 2025 ($ Million)	(14,293.91)	1,273.69	(13,020.22)	1,260.65	(11,759.57)
# – Recent Data is up to February 28, 2025

Data Source: NSDL (Negative figures in brackets)

Year 2025 has surely begun on a deeply negative note with $(11,759) Million of net selling overall by FPIs. This includes $(13,020) Million of net selling in equities, partially offset by $1,261 Million of net buying in debt. The IPO action has been fairly tepid in recent weeks and this week there are no mainboard IPOs. Even companies that have firmed up IPO plans, are just waiting in the sidelines for the market sentiments to improve. With the new SEBI chair, Tuhin Kant Pandey, taking charge, the markets would be awaiting for some market-friendly measures from the new SEBI chief.

FPI SENTIMENTS – THE WEEK THAT WAS

For the week to February 28, 2025, FPIs remained net sellers to the tune  of $(1,253) Million, higher than the previous week. Here is the week that was.

• The Q3FY25 estimate of real GDP growth has been pegged at 6.5%. This is not bad after a tepid start to the year. However, this pre-supposes a Q4 real GDP growth at closer to 7.5% and most economists have their doubts if that is feasible.
• The second estimate of full year real GDP growth has pegged FY25 growth at 6.5%; with most of the pressure coming from manufacturing and financial services. Even the nominal GDP growth for FY25 indicates a 300 bps erosion in growth momentum.
• Core sector growth for January 2025 came in at 4.6%. Ironically, refinery products with a weight of 28% in the core basket, saw an 8% bounce in the month. However, natural gas was negative for seventh month in a row and exploration is down in 9 out of 10 months.
• There was a spike in the fiscal deficit and the revenue deficit in the January 2025 update as it scaled closer to the 75% of full year target mark. That means; the final fiscal deficit for FY25 could be in the range of 4.8% to 4.9% of GDP, slightly off the budget estimates.
• In key US data, the second estimate of Q4 GDP growth came in at 2.3%. This is lower than Q2 and Q3, but full year growth will be well above 2.5%. However, PCE inflation at 2.5% shows the last mile still sticky and could impact pace of rate action.

Let us turn to the granular FPI flow story in last 4 weeks.

DAILY FPI EQUITY FLOWS FOR LAST 4 ROLLING WEEKS

Here is the last 4 rolling weeks data on FPI flows in rupee terms and in dollar terms.

Date	FPI Flow (₹ Crore)	Cumulative flows	FPI Flow($ Million)	Cumulative flows
03-Feb-25	-1.32	-1.32	-0.15	-0.15
04-Feb-25	-3,628.00	-3,629.32	-416.46	-416.61
05-Feb-25	1,029.43	-2,599.89	118.16	-298.45
06-Feb-25	-1,147.53	-3,747.42	-131.56	-430.01
07-Feb-25	-3,594.36	-7,341.78	-410.50	-840.51
10-Feb-25	-472.69	-7,814.47	-54.04	-894.55
11-Feb-25	-2,297.12	-10,111.59	-262.27	-1,156.82
12-Feb-25	-4,089.26	-14,200.85	-470.65	-1,627.47
13-Feb-25	-4,875.81	-19,076.66	-561.43	-2,188.90
14-Feb-25	-2,195.60	-21,272.26	-252.71	-2,441.61
17-Feb-25	-5,023.44	-26,295.70	-578.16	-3,019.77
18-Feb-25	-2,122.76	-28,418.46	-244.63	-3,264.40
19-Feb-25	0.00	-28,418.46	0.00	-3,264.40
20-Feb-25	8,216.28	-20,202.18	944.68	-2,319.72
21-Feb-25	-3,507.56	-23,709.74	-404.56	-2,724.28
24-Feb-25	-3,431.23	-27,140.97	-396.01	-3,120.29
25-Feb-25	-5,719.21	-32,860.18	-659.72	-3,780.01
26-Feb-25	0.00	-32,860.18	0.00	-3,780.01
27-Feb-25	-2,833.92	-35,694.10	-325.73	-4,105.74
28-Feb-25	1,119.75	-34,574.35	128.39	-3,977.35

Data Source: NSDL

• In last 7 rolling weeks, FPIs saw net outflows $(283) Million, $(1,601) Million, $(841) Million, $(1,604) Million, $(2,283) Million, $(2,568) Million, and $(2086) Million. In the week to February 28, 2025, net FPI equity outflows stood at $(1,253) Million.
• If you look at the last 4 rolling weeks on a cumulative basis, total net FPI outflows from equities were to the tune ₹(34,574) Crore or $(3,977) Million; with the broad trend still veering towards FPI sell-off.

With the GDP data and the other macros out of the way, the coming week focus will be on the US employment data. From a longer term perspective, markets will be watching the CAD updated for Q3 and also statements from the new SEBI chief!