Foreign Portfolio Investors (FPIs) ended a three-month period of selling in October 2025, allocating a net investment of ₹14,610 crore in Indian stocks, which included ₹10,707.97 crore directed towards the primary market through IPOs.
Experts believe that despite relatively high valuations, the recovery in earnings and a robust pipeline of IPOs continue to attract FPI interest. Also, the surge in buying has been fueled by steady corporate earnings, anticipated rate cuts by the US Federal Reserve, and optimism surrounding a potential US-India trade agreement.
Up until now in 2025, foreign institutional investors (FIIs) investments through the primary market have totaled ₹54,292 crores. This sharply contrasts with the total selling figure through exchanges, which has reached ₹1,94,201 crores by the end of October, according to data from NSDL.
Ross Maxwell, Global Strategy Lead at VT Markets said that the surge in FPI participation in IPOs indicates a subtle shift rather than a broader reversal of cautious sentiment. While overall FPI flows into the secondary market remain uneven due to global rate uncertainty and geopolitical risks, primary market inflows show investors are differentiating between short-term volatility and long-term opportunity.
By being selective and entering through IPOs, FPIs are signalling confidence in India’s long-term economic path and earnings potential, while maintaining a measured approach to risk.
Moreover, FPIs are probably identifying prospects mainly in areas like financial services, renewable energy, and consumer technology, to secure early investments in high-quality firms that align with India’s long-term growth goals.
Concurrently, the instability in global bond yields and currency variations has increased the risks in secondary markets, leading investors to allocate funds via IPOs, where valuations tend to be more justifiable and allocations more strategic.
Will the primary market rally continue?
In general, the inflows observed in October reflect both a trust in India’s foundational narrative and a strategic shift in response to persistent global challenges. This pattern highlights India’s increasing prominence as a favoured location for international capital in search of growth, stability, and reliable investment prospects, according to experts.
Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments, explained that investing in the primary market has been a proven success strategy for FIIs and also domestic institutional investors. The red-hot IPO market and the high valuations that investors are prepared to pay for IPOs have ensured the success of this strategy. Barring unforeseen circumstances, this trend is likely to continue.
However, it is too early to say that the FII buying in the secondary market in October will continue in November, too. If the market rallies to new highs, they may again turn sellers.
On the other side, Khushi Mistry, Research Analyst at Bonanza, added that future flows remain volatile and dependent on corporate earnings growth, valuations, and global economic conditions. Overall, IPO participation by FPIs is expected to sustain in the near term amidst solid fundamentals and quality offerings.
Upcoming IPOs
The top five anticipated IPOs for November include the Groww IPO, which has already started accepting subscriptions today. Investors are eagerly anticipating the Pine Labs IPO, boAt IPO, PhysicsWallah IPO, and ICICI Prudential AMC IPO.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
