FPI Investment Trends in Indian Stock Market: December 2024 Review

In December 2024, Foreign Portfolio Investors (FPIs) made a comeback as net buyers in the Indian stock market, reversing two consecutive months of heavy selling. FPIs invested a total of ₹15,447 crore in Indian equities during the month, showing a strong interest in sectors such as Information Technology (IT), financial services, and realty.

The overall FPI inflows across various asset classes, including equities, debt, hybrid instruments, and debt-VRR, amounted to ₹25,938 crore in December. When considering the entire year of 2024, FPIs invested ₹427 crore in Indian equities. In terms of total FPI inflows across all asset classes, the figure stood at an impressive ₹1.65 lakh crore. The Indian debt market also saw a significant FPI inflow of ₹13,000 crore during the year.

Key Observations:

  • FPI Investment in 2024: In 2024, while FIIs were net sellers in the secondary market, they were significant buyers in the primary market, particularly through the Qualified Institutional Placement (QIP) route.
    • In December 2024, FIIs sold equities worth ₹2,590 crore via exchanges but bought ₹18,036 crore in the primary market.
    • For the year 2024, FIIs sold equities worth ₹1,21,210 crore through exchanges, but their net purchases in the primary market totaled ₹1,21,637 crore. This resulted in a small net investment of ₹427 crore in Indian equities.
  • FII Selling: The selling trend by FIIs in the secondary market is attributed to concerns over high valuations. However, in the primary market, where valuations are considered fair, FIIs have remained active buyers. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, believes that FIIs are likely to continue selling in the secondary market, especially if the dollar remains strong and US bonds yield attractive returns.

Sectoral FPI Trends in December 2024:

  • Top Sectors for FPI Inflows:
    • IT: The IT sector was the biggest beneficiary of FPI inflows, with ₹9,050 crore invested.
    • Realty: This sector saw ₹4,778 crore of FPI investments.
    • Healthcare: Registered ₹3,767 crore in inflows.
    • Consumer Services: Received ₹3,220 crore in investments.
    • Capital Goods: Attracted ₹3,128 crore from FPIs.
    • Financial Services: Saw ₹3,086 crore in FPI inflows.
    • Other sectors, including Construction, Services, Textiles, Metals & Mining, and Telecommunications, also experienced inflows ranging from ₹372 crore to ₹1,764 crore.
  • Top Sectors for FPI Outflows:
    • Oil, Gas, and Consumable Fuels: This sector faced the highest FPI outflows, with ₹10,826 crore sold.
    • Automobile & Auto Components: Recorded ₹4,371 crore in FPI outflows.
    • FMCG: Saw ₹2,789 crore in selling by FPIs.
    • Other sectors with significant outflows included Power, Consumer Durables, and Construction Materials, which saw ₹1,862 crore, ₹900 crore, and ₹370 crore in outflows, respectively.

Disclaimer:

The views and recommendations in this report are based on individual analysts’ and broking companies’ assessments. It is advised that investors conduct their research and consult with financial advisors before making any investment decisions.

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