In the final two weeks of May, Foreign Portfolio Investors (FPIs) infused ₹6,989 crore into Indian equities, buoyed by positive developments such as the India-Pakistan ceasefire, renewed optimism over a potential US trade agreement, and a surge in block deals, according to data from Prime Infobase.
Telecom Leads FPI Inflows Amid Growth Prospects
The telecom sector was a major beneficiary, attracting ₹7,052 crore in FPI inflows. Analysts attribute this surge to rising subscriber numbers and the anticipated tariff hikes that are expected to bolster revenue and margins. “Telecom remains a compelling growth story, supported by expanding subscriber bases and strong potential for tariff increases,” said Chokkalingam G, Founder of Equinomics Research.
Capital Goods and Services Sectors Also Gain Traction
Beyond telecom, services and capital goods stocks saw significant FPI interest, receiving ₹6,210 crore and ₹3,094 crore, respectively. This trend suggests growing investor confidence in India’s economic momentum and infrastructure development.
IT Sector Sees Outflows on Weak Global Outlook
In contrast, the information technology (IT) sector witnessed FPI outflows worth ₹2,725 crore, amid lingering uncertainty in the US market, a key revenue source for Indian tech firms. “The medium- to long-term outlook for IT remains subdued, with dollar revenue growth expected to remain in the low single digits,” Chokkalingam noted.
Selling Pressure in Other Sectors
Other sectors that experienced selling pressure during this period included healthcare, power, consumer services, and automobiles, reflecting selective investor sentiment amid global and domestic macroeconomic shifts.
