FPI secondary equity selling offset by primary market inflow
Foreign Portfolio Investors were net sellers in secondary Indian equities last week but saw strong primary market participation and debt inflows, leading
Foreign Portfolio Investors (FPIs) were net sellers of Rs 11,490 crore in secondary equities between September 21 and 25, provisional exchange data shows. For the same week, settled depository data revealed a net Rs 3,843 crore inflow into equities, with primary-market investments reaching approximately Rs 5,848 crore.
Provisional figures indicated secondary equity selling of roughly Rs 2,006 crore. The Nifty index fell around 0.88% during the week despite a late rebound. FPIs recorded a significant Rs 5,515 crore primary-market inflow on September 24 alone, contributing to a total primary market investment of Rs 54,398 crore for the period.
Depository and debt data reveal offsetting inflows
Settled data from depositories presented a more nuanced picture than provisional numbers. It confirmed the net equity inflow of Rs 3,843 crore. FPIs also posted a net Rs 885 crore inflow into debt-related instruments for the week.
Debt flows were mixed across different investment routes. Buying under the Fully Accessible Route for government securities offset selling in other segments.
| Route | Net Flow (Rs crore) |
|---|---|
| Fully Accessible Route (FAR) | 2,912 (buying) |
| General Debt | 822 (selling) |
| Voluntary Retention Route (VRR) | 1,205 (selling) |
NSE IPO draws strong FPI interest amid broader market caution
The primary market activity was highlighted by strong foreign interest in the National Stock Exchange's initial public offering. FPIs submitted bids for 140.32 million shares in the NSE IPO. The offer closed with an overall subscription of 5.7 times, with the Qualified Institutional Buyer portion subscribed 12.68 times.
Macro factors keep FPI outlook data-dependent
Key global macro variables remained under pressure, influencing investor sentiment. Brent crude oil prices stayed above $100 per barrel. The Indian rupee hovered around Rs 96 per US dollar. The US 10-year Treasury yield was relatively unchanged on Friday after recent selling pressure intensified following hawkish Federal Reserve commentary and stronger-than-expected economic data.
The near-term FPI outlook is likely to remain sensitive to data and macro shifts rather than moving in one clear direction. Another rise in US yields or crude oil prices could prolong selling in secondary markets. A combination of easing crude, stabilisation in US yields and a firmer rupee could encourage some re-engagement in secondary equities.
