FPIs increase net flows in the secondary market in September

A strong net inflow by foreign portfolio investors (FPIs) in September has turned their total secondary market investment in Indian equities positive for the calendar year so far to $4,140.3 million (Rs 34,554 crore) compared with a net outflow of $1,417 million (negative Rs 11,998 crore) at the end of August. According to the data from NSDL, FPIs net equity investment in September was $6,890.5 million including primary and secondary market transactions, their highest monthly investment since December 2023 when they had pumped $7,939 million in Indian equities.

FPIs continued to invest even on the last day of September, fetching $43 million on a net basis despite selling pressure in the broader market which pulled down the benchmark indices by nearly 1.5% on Monday.

In addition, net inflow of FPIs in the secondary market at $5,557.3 million in September outpaced their primary market investment of $1,322.2 million unlike in the five out of the first nine months of 2024 when they had shown more interest in investing through IPO and QIB routes. In the first nine months of 2024, FPIs invested net $12,054 million in equities. Of this, $7,914 million was through the primary route.

Unlike FPIs, domestic mutual funds showed moderation in equity investments in September with a net investment of Rs 26,072 crore compared with Rs 31,685 crore in the previous month. On September 27, local funds reported the second highest single day net equity investment of Rs 7,786.1 crore in the current calendar year, following Rs 8,547.6 crore of investment on June 28. Their net equity investment in the first nine months of the year reached Rs 2,73,535 crore compared with Rs 1,12571 crore in the corresponding period of the previous year.

In the remaining three months of 2024, the secondary market flow of FPIs is likely to stay volatile given escalating geopolitical tensions and increasing interest of global investors in Chinese equities. In the primary market, their flow may remain buoyant given the expected launch of some of the big ticket IPOs including that of Hyundai Motor India, Swiggy, NTPC Green, and Afcons Infrastructure which together will raise over R 60,000 crore over the next few weeks.