Foreign Investors Infuse ₹4,452 Crore in Indian Equities This Week: May FPI Investment at ₹18,620 Crore



Weekly FPI Investment Trends

Foreign Portfolio Investors (FPIs) made a significant comeback to Indian equity markets this week. Between May 13 and May 16, FPIs infused a net investment of ₹4,452.3 crore, according to data released by the National Securities Depository Limited (NSDL).

The highest single-day inflow of the week was recorded on Friday, with ₹5,746 crore pumped into Indian equities. However, the week was not consistently bullish, as Tuesday saw a net outflow of ₹2,388 crore, hinting at some profit booking or cautious sentiment from foreign investors.

May 2025 FPI Performance

So far in May 2025, FPIs have invested a total of ₹18,620 crore in Indian equity markets, marking a strong reversal in foreign investment behavior. These inflows are largely attributed to:

  • Stabilizing global financial conditions

  • Steady domestic growth forecasts

  • Optimism surrounding India's general election outcomes

Despite these positive signs, FPIs remain net sellers for the calendar year 2025, with a total net outflow of ₹93,731 crore as of mid-May. This trend has been shaped by heavy selling in the first quarter.

Historical FPI Activity in 2025

Here’s a snapshot of FPI activity in the months leading up to May:

Month Net FPI Inflows/Outflows (₹ crore)
January -₹78,027
February -₹34,574
March -₹3,973
April ₹4,223
May (till 16th) ₹18,620

The strong inflows in April and May indicate a turnaround in foreign investor sentiment after three months of persistent outflows driven by:

  • Geopolitical tensions

  • Rising U.S. bond yields

  • Volatile global macroeconomic conditions


Market Performance and Sector Highlights

This renewed FPI interest coincided with a bullish rally in Indian benchmark indices last week:

  • Nifty 50 surged by 4.2%

  • BSE Sensex rose by 2,875 points

Sectoral Performance Highlights:

  • Defence: +17%

  • Capital Markets: +11.50%

  • Realty: +10.85%

All major sectors ended in the green, led by investor optimism in sectors aligned with government reforms and capex-driven growth.

Choosing the Right ULIP Plan: Key Factors to Consider

What is a ULIP?

A Unit Linked Insurance Plan (ULIP) is a hybrid financial product that combines life insurance coverage with investment opportunities. A portion of the premium is invested in funds (equity, debt, or balanced), while the remaining part goes toward providing life cover.

In case of the policyholder's death during the policy term, the nominee receives either the fund value or the sum assured, whichever is higher. On maturity, the insured receives the accumulated fund value, determined by market performance.

Benefits of ULIP Plans

Here are the main benefits of investing in ULIPs:

1. Wealth Accumulation

ULIPs are designed for long-term wealth creation through market-linked investments. They help meet major life goals such as:

  • Children’s education

  • Marriage

  • Home purchase

  • Retirement

2. Dual Benefits

They provide both life insurance and investment growth, ensuring financial security while growing wealth.

3. Tax Benefits

  • Section 80C: Tax deduction on premium paid

  • Section 10(10D): Maturity amount is tax-exempt

4. Transparency

ULIPs offer clear information about fund performance, investment strategies, and charges, allowing informed decision-making.

5. Flexibility

  • Switch between fund types (equity, debt, balanced)

  • Partial withdrawals after lock-in period

  • Adjust premiums or top-up investments

How Does a ULIP Work?

ULIPs offer several dynamic features:

  • Fund Switching: Based on risk tolerance or market trends

  • Policy Tenure: Fixed tenure for long-term goals

  • Withdrawal Option: Partial withdrawals post lock-in

  • Death and Maturity Benefits: Death benefit or fund value for nominees; maturity value for surviving policyholders

Investors can choose between equity-heavy or debt-oriented portfolios based on individual risk profiles. A ULIP calculator is helpful for evaluating premium, tenure, returns, and benefits.

How to Choose the Right ULIP Plan?

When selecting a ULIP plan, consider the following factors:

1. Investment Goals

Assess your future financial needs (education, marriage, retirement) and choose a plan that aligns with them.

2. Compare Plans

Evaluate multiple ULIP plans across insurers by checking features, charges, fund options, and historical returns.

3. Flexibility

Opt for a plan that allows:

  • Easy switching of funds

  • Premium redirection

  • Top-ups and partial withdrawals

4. Risk Profile

  • High-risk takers: Equity funds

  • Risk-averse investors: Debt or balanced funds

5. Solvency Ratio of Insurer

A high solvency ratio indicates the insurer’s ability to meet long-term obligations and claims.

6. Claim Settlement Ratio (CSR)

Higher CSR implies better reliability and efficiency of the insurance provider.

7. Investment Strategy

Select ULIPs that support your strategy — whether for growth, safety, or a balanced mix.

Who Should Invest in ULIPs?

ULIPs are suitable for:

  • Investors at Various Life Stages
    Young professionals can opt for equity funds; retirees may prefer debt options.

  • Medium to Long-Term Investors
    Ideal for goals 5–10 years away due to the 5-year lock-in and compounding benefits.

  • Investors with Varying Risk Profiles
    Flexible enough to serve both aggressive and conservative investors.

Conclusion

ULIPs are efficient long-term financial instruments that offer life cover, market-linked returns, and tax benefits under a single plan. They are a superior alternative to traditional insurance plans for those seeking wealth creation along with protection.

However, one must compare features, charges, and risk-return profiles before investing. When chosen wisely, ULIPs can be a cornerstone in your financial planning, helping you achieve your life goals with stability and growth.


Location: Pune, Maharashtra, India

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