Foreign Portfolio Investors made a strong comeback to the Indian markets in October 2025, pumping in about ₹35,598 crores, which is the highest monthly inflow this year so far. This flush marked an end to a painful three-month selling streak. FPIs pulled out nearly ₹77,000 crores from the market between July and September.
The October inflows by FPIs were driven by a surge in capital from Europe and the United States. France was among the top investors by a significant margin with an inflow of ₹22,832 crores. Germany pumped in ₹4,613 crores, and the United States added an amount of ₹4,545 crores, as mentioned in the National Securities Depository Limited (NSDL) reports.
Why did FPIs suddenly pump in cash?
Valuation and Earnings: The significant correction in Indian equities over the last quarter made valuations more reasonable. A strong second-quarter (Q2) corporate earnings season led investors to enter the market with trust and confidence.
Global factors: The recent rate cut by the US Federal Reserve has put pressure on global bond yields, which has made emerging markets like India more stable and trustworthy. Adding to this, the growing positivity for a potential US-India trade deal to ease tariff tensions has boosted investor confidence.
The IPO boom: A sizeable portion of the inflows was towards the primary market. As such, FPIs aggressively subscribed to a host of high-value IPOs in October, pumping more than ₹10,700 crore into new issues that saw some big-ticket IPOs, including Tata Capital.
Stronger domestic economy: The steady domestic GDP growth, moderating inflation, and supportive reforms such as the GST rationalisation have reinforced India’s growth economy and differentiated it from other emerging markets.
The capital was largely funnelled into financial services, driven by IPOs, autos, and capital goods. Though the inflows are a strong vote of confidence, the continued buying will largely depend upon ongoing earnings growth and a formal resolution to global trade uncertainties.
