May Market Pulse: Monthly Investment Insights
Financial Report
Market Movers in May: FPIs Return, DIIs Dominate, MFs Reshape Portfolios
May 2025 witnessed a notable shift in market sentiment as key institutional players—FPIs, DIIs and Mutual Funds—realigned their strategies across equities and debt. Their collective actions offer valuable insights into the evolving investment landscape.
FPIs Shift Gears in May: Favour Telecom, Services & Capital Goods; Exit IT, Power & Healthcare
Sectors That Attracted FPI Flows
Telecom, Services & Capital Goods Lead the Pack: FPIs showed strong bullishness in Telecommunication (₹8,089 Cr), Services (₹7,972 Cr), and Capital Goods (₹5,327 Cr)—with most flows concentrated in the second half of May, driven by optimism in digital infrastructure, outsourcing and industrial growth.
Financials, Oil & Gas, and Chemicals Draw Steady Interest: Financial Services saw ₹4,028 Cr in net inflows, despite second-half profit-taking. Oil & Gas attracted ₹2,520 Cr, while Chemicals drew ₹1,308 Cr, signaling interest in core economy and energy-related sectors.
Recovery Noted in FMCG & Construction Materials: After a weak start, FMCG reversed losses to close with ₹815 Cr in net buying. Construction Materials received ₹575 Cr, indicating a slow but steady accumulation.
Sectors Facing the Heat
FPIs reduced their exposure in defensive and interest-rate sensitive sectors. Healthcare led the outflows with ₹2,614 Cr, followed by Power (₹2,494 Cr) and Information Technology (₹2,436 Cr).
Consumer Durables, Realty, and Consumer Services also saw net selling between ₹491 Cr and ₹1,734 Cr.
Smaller sectors like Textiles, Diversified and Construction Services witnessed minimal activity.
FPIs Turn Net Buyers in May
FPIs Clock 2025’s Best Monthly Inflow: After a cautious start to 2025, Foreign Portfolio Investors (FPIs) reversed their trend in May with net equity inflows of ₹19,860 Cr—their highest monthly investment this year.
Falling Yields Draw FPI Debt Inflows: FPIs also added ₹12,155 Cr to Indian debt, signalling renewed confidence amid easing global yields and domestic liquidity support.
YTD Snapshot: FPIs remain net equity sellers on a year-to-date basis, with total outflows of ₹92,491 Cr, while debt investments have touched ₹36,648 Cr during the same period.
DIIs: Maintain Strong Support
DIIs Record One of the Strongest Monthly Buys: Domestic Institutional Investors (DIIs) continued their robust buying streak, pumping ₹67,642 Cr into equities during May 2025. This marks one of their strongest monthly investments in the past year, further reinforcing their role as a stabilizing force amid FPI volatility. For the calendar year to date, DIIs have infused a massive ₹2.85 Lakh Cr into equities, showing persistent confidence in India’s growth story despite global uncertainties.
Mutual Funds Stay Resilient
MFs Clock 4-Month High in Equity Buys: Mutual Funds registered net equity inflows of ₹56,302 Cr in May 2025—nearly three times higher than April—marking their strongest monthly equity investment in four months. This surge reflects renewed investor appetite driven by steady SIP flow. Cumulatively, Mutual Funds have infused ₹1.93 Lakh Cr into equities between January and May 2025.
FPI Holdings Rebound in May: Equity & Debt Rise Together
Total Foreign Portfolio Investors AUC( Assets Under Custody) rose to ₹78.03 Lakh Cr in May 2025, marking a monthly increase of ₹2.31 Lakh Cr over April, driven by a pickup in both equity and debt categories.
Equity AUC climbed to ₹71.27 Lakh crore, its highest level in CY25, reflecting strong market performance and fresh inflows during the month. Debt segments (General + VRR + FAR) also saw modest gains.
The recovery follows two volatile months, signaling renewed FPI confidence in Indian assets, particularly after April’s steady macro indicators and May’s market stability.
For a comprehensive understanding and more insights, please go through our detailed report.