Weekly Musings – FPI flows for week ended March 21, 2025

24 Mar 2025 , 09:45 AM

FPIS NET SELLERS, BUT MARKETS RALLY OVER 4%

If the FPI selling in the previous week was relatively subdued, the week to March 21, 2025 saw 2 days of net FPI buying and some aggressive FPI inflows into debt. At $(194) Million, the net FPI selling this week was almost insignificant. Technically, this marks the sixteenth consecutive week of net selling by FPIs, but the momentum is starting to slow. This week, the market recovery was largely on liquidity hopes post the Fed statement on bond buying.

In other macros, the rupee hardened sharply to ₹85.99/$, on the back of a rally in the markets, FPI flows into debt and RBI conducting dollar liquidity swaps. Meanwhile, Brent Crude rallied to $72.50/bbl; from recent lows of $70/bbl. The oil markets are in a state of flux, and the reciprocal tariffs could hold the key. For now, the oil markets are betting on a major growth thrust to the US and Chinese economy, pulling up global growth.

MACRO FPI FLOW PICTURE UP TO MARCH 21, 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)
Mar-2025 (₹ Crore) #	(33,419.92)	1,700.98	(31,718.94)	36,032.35	4,313.41
Total for 2025 (₹ Crore)	(1,57,072.61)	12,752.38	(1,44,320.23)	47,121.98	(97,198.25)
For 2025 ($ Million)	(18,121.30)	1,468.52	(16,652.78)	5,400.21	(11,252.57)
# – Recent Data is up to March 21, 2025

Data Source: NSDL (Negative figures in brackets)

Year 2025 has surely begun on a deeply negative note with $(11,253) Million of net selling overall by FPIs. This includes $(16,653) Million of net selling in equities, manfully offset by $5,400 Million of net buying in debt. The IPO action has been fairly tepid in recent weeks with most mainboard IPOs on hold for the last one month. The market boost this week came as the US Fed reduced the bond downsizing from $60 Billion to $40 billion a month.

FPI SENTIMENTS – THE WEEK THAT WAS

For the week to March 21, 2025, FPIs remained net sellers to the tune  of $(194) Million, albeit sharply lower than the previous weeks. Here is the week that was.

• WPI inflation for February inched up from 2.31% to 2.38%. While food inflation and primary inflation eased, fuel inflation continued to remain subdued. However, the pressure came from a spike in manufacturing cost inflation.
• There was some good news on the trade front, with the merchandise trade deficit falling sharply to $14.05 Billion. In fact, if you look at the overall picture (including services trade), India actually closed February 2025 with a trade surplus of $4.43 Billion.
• US held Fed rates in its 19-March meeting in the range of 4.25%-4.50% due to the business uncertainties caused by Trump tariffs. The dot-plot is now pencilling 2 rate cuts of 25 bps each in CY-2025 and another 2 rate cuts in CY-2026.
• The quarterly Fed update on macro projections had some nasty surprises. US GDP growth estimates for 2025 were cut from 2.1% to 1.7%. Unemployment estimate was upped by 10 bps to 4.4%, while core PCE inflation estimate was upped 30 bps to 2.8%.
• Big IPOs are gearing up for the market. There is the $2 billion IPO of Tata Capital, which has been set in motion and LG India’s ₹15,000 Crore IPO has got SEBI approval. These big IPOs will, obviously, need much more market depth and buying appetite to sail through.

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
24-Feb-25	-3,431.23	-3,431.23	-396.01	-396.01
25-Feb-25	-5,719.21	-9,150.44	-659.72	-1,055.73
26-Feb-25	0.00	-9,150.44	0.00	-1,055.73
27-Feb-25	-2,833.92	-11,984.36	-325.73	-1,381.46
28-Feb-25	1,119.75	-10,864.61	128.39	-1,253.07
03-Mar-25	-12,026.05	-22,890.66	-1,375.97	-2,629.04
04-Mar-25	-4,662.53	-27,553.19	-533.88	-3,162.92
05-Mar-25	-3,536.05	-31,089.24	-404.68	-3,567.60
06-Mar-25	-1,889.48	-32,978.72	-216.96	-3,784.56
07-Mar-25	-2,638.78	-35,617.50	-303.00	-4,087.56
10-Mar-25	-3,214.76	-38,832.26	-369.25	-4,456.81
11-Mar-25	-497.92	-39,330.18	-57.08	-4,513.89
12-Mar-25	-139.15	-39,469.33	-15.93	-4,529.82
13-Mar-25	-1,410.29	-40,879.62	-161.61	-4,691.43
14-Mar-25	0.00	-40,879.62	0.00	-4,691.43
17-Mar-25	-857.26	-41,736.88	-98.44	-4,789.87
18-Mar-25	-3,707.30	-45,444.18	-427.15	-5,217.02
19-Mar-25	710.42	-44,733.76	81.97	-5,135.05
20-Mar-25	-1,031.36	-45,765.12	-119.23	-5,254.28
21-Mar-25	3,181.57	-42,583.55	368.65	-4,885.63

Data Source: NSDL

• In previous 7 rolling weeks, FPIs saw net outflows $(604) Million, $(2,835) Million, $(1,253) Million, $(283) Million, $(1,601) Million, $(841) Million, and $(1,604) Million. In the recent week to March 21, 2025, net FPI equity outflows eased to $(194) Million.
• If you look at the last 4 rolling weeks on a cumulative basis, total net FPI outflows from equities were to the tune ₹(42,584) Crore or $(4,886) Million; with the broad trend still veering towards FPI sell-off.

The next big triggers for the market will come from macro data points like the India Q3 CAD, India core sector and fiscal deficit numbers; US Q4GDP and the US PCE inflation. Meanwhile, a lot will depend on how long this liquidity euphoria in the market lasts!