Foreign Portfolio Investors (FPIs) ended a three-day streak of selling and emerged as net buyers in Indian markets on October 3, 2025, with an infusion of ₹1,150.25 crore, according to data from the National Securities Depository Limited (NSDL). This marked a notable shift from the previous trading session on October 1, when FPIs withdrew ₹2,253.74 crore.
The rebound was largely attributed to investments in the debt segment, particularly through the Voluntary Retention Route (VRR), which recorded net inflows of ₹897.66 crore on October 3. In the debt-VRR category, primary market investments surged to ₹1,036.76 crore, despite stock exchange-related outflows amounting to ₹139.10 crore.
Equity investments also showed a modest recovery, with net inflows of ₹183.66 crore on October 3, a significant improvement from the ₹4,026.06 crore outflow reported on October 1. The equity segment experienced gross purchases of ₹14,430.59 crore against sales of ₹14,246.93 crore. Primary market equity investments contributed ₹422.46 crore, while transactions in the stock exchange saw minor outflows of ₹238.80 crore.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, noted that sustained FPI selling persisted through September, with targeted sales reaching ₹27,163 crore. However, long-term trends showed that Foreign Institutional Investors (FIIs) invested ₹3,278 crore in equity during the primary market in September. Dr. Vijayakumar highlighted that the total sell figure for 2025 has now reached ₹198,103 crore, adding to the previously recorded ₹121,210 crore in 2024, culminating in a total of ₹319,313 crore over the last 21 months.
The trading week commenced negatively, with FPIs pulling out ₹6,292.08 crore on September 29, followed by ₹450.03 crore on September 30, and escalating to ₹2,253.74 crore on October 1, before recovery was observed on October 3.
Debt investments within the general limit category saw net inflows of ₹90.58 crore on October 3, while the Fully Accessible Route (FAR) experienced outflows of ₹116.48 crore. Hybrid instruments attracted ₹90.60 crore in net investments.
Shrikant Chouhan, Head of Equity Research at Kotak Securities, reported a continuing trend of net cash selling by FIIs, totaling ₹1,605.2 crore as of October 2025. He attributed the market volatility to global factors, including the potential U.S. government shutdown, optimism surrounding AI developments, mixed economic signals, strong earnings in the U.S., and rising gold prices.
FPI flows in September 2025 showed mixed results across key emerging markets. Brazil, Malaysia, the Philippines, South Korea, and Taiwan recorded inflows of US$994 million, US$19 million, US$46 million, US$5,105 million, and US$7,335 million, respectively. Conversely, India, Indonesia, Thailand, and Vietnam faced outflows of US$2,132 million, US$235 million, US$373 million, and US$937 million, respectively.
Dr. Vijayakumar elaborated on the reasons for sustained FPI selling, indicating that higher valuations in India relative to other markets had impacted FII strategies. However, with the valuation gap narrowing and projected improvements in Indian earnings for FY27, he suggested that FIIs are likely to reduce their sales activity in the near future.
Mutual funds recorded modest net inflows of ₹4.23 crore on October 3, while Alternative Investment Funds (AIFs) saw no activity. In dollar terms, FPIs invested US$129.70 million on October 3, with the rupee closing at ₹88.6778 per dollar.
Published on October 5, 2025.
