Foreign Investors Show Mixed Sentiment: Equity Inflows Surge, but June Remains in Red



Weekly FPI Inflows Boosted by RBI Rate Cut

Foreign Portfolio Investors (FPIs) infused ₹3,346.94 crore into Indian equities during the trading week from June 9 to June 13, as per data released by the National Securities Depository Limited (NSDL). The early part of the week saw strong inflows, largely driven by positive investor sentiment following a surprise rate cut by the Reserve Bank of India (RBI).

On June 6, 2025, the Monetary Policy Committee (MPC) of the RBI announced a 50 basis point reduction in the repo rate, bringing it down to 5.5%. This move was seen as a major boost to investor confidence, stimulating demand for equities in the Indian market.


Friday Outflow Reverses Weekly Gains

Despite early optimism, foreign investors turned cautious toward the end of the week due to escalating geopolitical tensions between Israel and Iran. On Friday, June 13, FPIs pulled out a significant ₹3,275.76 crore, which substantially offset the gains made earlier in the week.

June Still in Negative Territory

While the week closed with net positive flows, the overall FPI trend for June 2025 remains negative. So far this month, FPIs have withdrawn a net ₹5,402 crore, indicating persistent caution in global investor sentiment despite short-term opportunities.

Historical Trend: May Best Month of 2025 So Far

In contrast to June’s performance, May 2025 witnessed robust foreign investments, with net FPI inflows amounting to ₹19,860 crore, making it the best-performing month of the year in terms of foreign capital inflow. Previous months showed mixed results:

  • March 2025: Net FPI outflows of ₹3,973 crore

  • February 2025: Outflows of ₹34,574 crore

  • January 2025: Significant outflows of ₹78,027 crore


India Rises as Top Destination for Cross-Border Land Investment

India Ranked 7th Globally in Land & Development Site Investment

In a separate report by Colliers, India has emerged as one of the top 10 global destinations for cross-border capital investment in land and development sites. For the 12-month period ending Q1 2025, India attracted USD 735 million in foreign investment in this segment, placing it at seventh position globally.

Breakdown of Investment Sources

  • USD 332 million came from global capital sources

  • The remaining amount was contributed by regional capital flows

India’s share in global cross-border investment stood at 1.5%, slightly lower than previous quarters, but still above its five-year average of 1.2%—a testament to its continued attractiveness as a destination for long-term real estate and infrastructure capital.


APAC Dominates Global Investment Activity

The Colliers report highlighted the dominance of the Asia-Pacific (APAC) region, which accounted for 80% of all cross-border investment activity in the land and development space:

  • China alone attracted USD 38.1 billion, representing 79.7% of global capital flow.

  • Other leading APAC countries included Singapore, Malaysia, and Australia.

India’s continued position within the top ten countries showcases its strong fundamentals, growing urbanization, and long-term growth potential in real estate development.

Shifting Global Preferences in Capital Flows

Although investment activity has remained relatively low across all global regions in Q1 2025, especially compared to historical levels, a gradual shift in investor focus toward Europe is being observed. European investors are increasingly showing interest in emerging APAC markets, with India gaining significant traction in their portfolios.

In contrast:

  • North America saw a slight decline in investment activity and is gradually losing its status as a global safe haven.

  • EMEA (Europe, Middle East, and Africa) regions remained stable, without significant fluctuations.

Conclusion: Volatility Ahead, But India's Fundamentals Remain Strong

The Indian equity market continues to experience volatile foreign investment trends, shaped by a blend of macroeconomic policy shifts and geopolitical uncertainties. However, India’s appeal as a strategic real estate investment destination remains intact.

The RBI’s proactive monetary stance, combined with India's strong position in cross-border land investments, indicates a resilient economic framework that is expected to drive investor interest in the medium to long term.

As global capital becomes more selective, India’s ability to balance macroeconomic stability with growth-driven reforms will be key to sustaining foreign investor confidence across sectors.


Location: Pune, Maharashtra, India

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