FPIs again favor IPOs, pumping $1.3 billion into the primary market in November

ET Intelligence Group: Foreign portfolio investors (FPIs) continued to show higher interest in the domestic primary market compared to the secondary market amid a steady flow of IPOs for the fifth straight month in November. They invested a net $1.3 billion (₹11,894.7 crore) in the primary market, their highest in four months. Further, they once again became net sellers in the secondary market, reporting an outflow of $1.8 billion (₹15,659.3 crore) after buying equity worth $448.1 million in the previous month. Taking net inflows into the primary and secondary markets together, FPIs were net sellers of Indian equities worth $424 million (₹3,764.6 crore) in November.

For the first 11 months of 2025, foreign investors were net sellers of $16.4 billion (₹1.4 lakh crore) of Indian equities, including primary and secondary markets. FPIs have sold aggressively in the domestic market so far in 2025, compared to an outflow of $1.7 billion (₹15,019.6 crore) in the same period of the previous year. Moreover, they became net buyers last year with modest purchases of $124 million (₹427 crore), driven by their focus on the primary market where they invested a net $14.5 billion (₹1.2 lakh crore). So far in the current year, they have invested $7.6 billion (₹66,187 crore) in the primary market despite heavy sales of $24 billion (₹2.1 lakh crore) in the secondary market, surpassing sales of $14.3 billion in 2024 as a whole.

Domestic mutual funds continued to offset FPI outflows by increasing the extent of equity investments in November. Domestic mutual funds bought equities worth ₹38,173.8 crore in November till the 26th. So far this year, they have invested ₹4.5 lakh crore in equity, which is higher than last year’s total investment of ₹4.3 lakh crore.

For December, better-than-expected growth in gross domestic product (GDP), corporate earnings expectations for the third quarter and any progress on the US tariff front will be crucial factors for FPI fund flows. Additionally, their activity will be limited due to the holiday season in the latter part of the month.