FPIs Return as Net Buyers in October, Infuse Rs.8,696 Crore After Three-Month Selloff

After three months of relentless selling, Foreign Portfolio Investors (FPIs) made a decisive comeback in October 2025, turning net buyers with total inflows of ₹8,696 crore across equity and debt markets, according to data released by the National Securities Depository Limited (NSDL).

The turnaround marks a significant shift in sentiment as overseas investors return to Indian markets following persistent outflows earlier this year. Between January and September 2025, FPIs had offloaded ₹1.94 lakh crore worth of equities through exchanges, though they invested ₹54,292 crore in primary issuances, bringing total net outflows to ₹1.39 lakh crore during the first nine months of the year.

Biggest Single-Day Investment of the Year

The highlight of October came on October 29, when FPIs made their highest single-day net investment of ₹9,969 crore, led by ₹9,431 crore in equity purchases. This surge pushed the market higher and injected fresh optimism across sectors.

However, the buying spree was short-lived, followed by two consecutive days of selling — ₹780 crore outflow on October 30 and ₹1,677 crore outflow on October 31 — underscoring the volatile nature of global fund flows.

“October marked a reversal of the sustained selling by FIIs seen in the previous three months. For October, FIIs bought equity worth ₹3,902 crore through the exchanges. However, this figure includes some bulk deals too,” said Dr. V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Data also revealed that FPIs were net buyers of ₹566 crore on October 27 and ₹615 crore on October 28, ahead of the major buying session on the 29th, before paring exposure at the month’s end.

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Primary Market Draws Strong Foreign Participation

While secondary market flows remained volatile, the primary market continued to attract strong FPI participation. According to analysts, FPIs infused ₹10,707 crore through the primary route in October, capitalizing on India’s red-hot IPO market.

“The trend of sustained buying through the primary market continued in October. The high investor demand and substantial listing premiums in new issues are encouraging FIIs to participate aggressively,” added Dr. Vijayakumar.

Analysts believe that the strong IPO pipeline and robust corporate earnings have played a key role in drawing back foreign investors who had previously stayed on the sidelines amid global uncertainty.

Debt Segment Witnesses Mixed Trend

The debt segment showed a more nuanced picture. FPIs remained consistent buyers under the Fully Accessible Route (FAR), which allows investments in select government securities without limits. Daily inflows ranged from ₹88 crore on October 27 to ₹2,696 crore on October 30.

However, other debt categories such as the General Limit and Voluntary Retention Route (VRR) witnessed intermittent outflows, suggesting a cautious approach in the face of fluctuating global bond yields.

Overall, debt investments totalled ₹2,688 crore for the last week of October, indicating a shift toward safer assets amid geopolitical and economic uncertainty.

Renewed Confidence in Indian Markets

Market experts attribute the October rebound to a combination of stabilizing global cues, resilient domestic macro fundamentals, and India’s improving growth outlook.

“FPIs turning net buyers of Indian equities in October marks a notable shift after three consecutive months of selling. This $1.66 billion inflow reflects renewed foreign confidence in India’s macroeconomic and earnings stability,” said Himanshu Srivastava, Principal, Manager Research at Morningstar Investment Research India.

The Reserve Bank of India’s stable monetary policy stance and expectations of softening inflation have further bolstered India’s appeal compared to other emerging markets.

Global Flow Trends Show Regional Divergence

FPIs were not uniformly bullish across emerging markets. According to Shrikant Chouhan, Head of Equity Research at Kotak Securities, India was among the top recipients of FPI inflows in October, alongside Indonesia and South Korea.

“India, Indonesia, and South Korea attracted inflows of $2.4 billion, $714 million, and $3.1 billion respectively. In contrast, Brazil, Malaysia, the Philippines, Taiwan, Thailand, and Vietnam saw outflows ranging from $100 million to $1.8 billion,” Chouhan noted.

This regional divergence underscores India’s growing position as a preferred emerging market destination, driven by structural reforms, stable governance, and consistent economic growth.

Caution Ahead Despite Rebound

Despite October’s strong showing, experts caution that FPI flows may remain volatile in the near term.

“The aggregate buy figure through exchanges doesn’t guarantee that FIIs will remain in buy mode going forward. India’s relatively higher valuations could still prompt selective profit-booking,” warned Vijayakumar.

He emphasized that the direction of FPI flows will depend largely on the trajectory of India’s corporate earnings and global interest rate trends.

“If India continues to deliver strong earnings growth and global risk appetite stays stable, FPI inflows could sustain into the next quarter,” he added.

Outlook: Guarded Optimism for FY26

As global markets stabilize and India enters the pre-budget phase, analysts expect continued but measured FPI participation. The combination of sound macroeconomic indicators, steady domestic demand, and policy continuity positions India favorably for FY26.

Still, with elevated valuations and external risks — including U.S. rate decisions, geopolitical tensions, and oil price fluctuations — volatility in foreign flows remains a key watchpoint.

For now, October’s ₹8,696 crore turnaround signals that global investors are once again taking a serious look at India — not just as a tactical bet, but as a long-term growth story in the global investment landscape.

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