FIIs Pour ₹38,000 Crore into Indian Equities in Late April, Favour Financials and Capital Goods

Foreign Institutional Investors (FIIs) returned robustly to Indian equities in the second half of April 2025, injecting over ₹38,000 crore, with financial services leading the charge. The sector attracted ₹22,910 crore, accounting for over 60% of inflows, driven by strong balance sheets and healthy asset quality in banks like IndusInd Bank and Aptus Value Housing, which saw FII holdings rise by 4.79% and 5.88%, respectively.

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Capital goods followed, receiving ₹2,944 crore, a sharp reversal from ₹3,019 crore in outflows earlier in the month, reflecting optimism in infrastructure spending. Telecommunications ranked third, with inflows exceeding ₹2,500 crore, up from ₹2,137 crore in the first half, buoyed by sustained sectoral demand.

FIIs also pivoted to consumer-focused sectors, investing ₹2,330 crore in FMCG, ₹1,983 crore in consumer services, ₹1,184 crore in chemicals, and ₹965 crore in consumer durables, reversing earlier sell-offs. The chemicals sector stocks, including companies like Coromandel International, saw a 10% jump in FII holdings, fuelled by strong domestic and export demand. In contrast, FIIs continued exiting IT, auto, metals, mining, construction, and real estate.

The IT sector faced significant pressure, with ₹1,385 crore in outflows in late April, following a ₹13,828 crore sell-off earlier, while auto and metals saw outflows of ₹645 crore and ₹574 crore, respectively.

The buying spree extended into early May, with FIIs investing ₹2,585.86 crore on May 7, ₹3,794.52 crore on May 6, ₹497.79 crore on May 5, and ₹2,769.81 crore on May 2, marking 15 consecutive sessions of inflows totaling nearly ₹10,000 crore. This shift from heavy selling—₹78,000 crore in January and ₹34,000 crore in February—to net buying of ₹4,223 crore in April reflects growing confidence in India’s economic resilience.

FIIs increased stakes in finance firms like Sammaan Capital (up 5.16%) and pharma companies like JB Chemicals (up 3.65%), while reducing holdings in India Cements (down 9.56%) and CDSL (down 5.69%). According to HDFC Securities, FIIs’ net long-to-short ratio in index futures hit a seven-month high, signaling a bullish stance.

Conclusion

FIIs’ aggressive ₹38,000 crore investment in late April, led by financial services, capital goods, and telecom, underscores renewed faith in Indian markets. While consumer sectors gained traction, persistent IT and auto sell-offs highlight selective optimism, with investors eyeing India’s economic stability amid global uncertainties.