FPI Tracker: Telecom, services, capital goods corner major chunk of inflows; IT, healthcare face heavy selling in May

Foreign portfolio investors (FPIs) remained net buyers in the Indian stock market in May, infusing ₹19,863 crore across sectors. According to data from the National Securities Depository Limited (NSDL), this marked the highest monthly FPI inflow since September 2024. 

However, the investment pattern reveals a stark divergence in sentiment, with selective sectors attracting heavy inflows while others faced sharp sell-offs.

Sectoral Standouts: Telecom, Services Shine Bright

The telecommunication sector emerged as the biggest beneficiary of FPI inflows, drawing ₹8,089 crore in net inflows during the month — a sharp jump from the ₹1,037 crore invested between May 1 and 15 to ₹7,052 crore in the latter half of the month.

The services sector also saw robust inflows worth ₹7,972 crore, with FPIs increasing their exposure substantially in the second half of the month ( ₹6,210 crore vs ₹1,762 crore in the first half), NSDL data showed.

Capital goods continued to attract consistent foreign capital, receiving ₹5,327 crore in May. This aligns with the broader capex revival theme and ongoing infrastructure push by the government.

The financial services sector witnessed ₹4,028 crore in net inflows despite some profit booking in the second half. FPIs bought financial stock worth ₹4,728 crore during May 1 to 15, followed by selling worth 700 crore during May 16 to 31.

Heavy Outflows in IT, Healthcare and Power

In contrast, the Information Technology (IT) sector witnessed significant FPI selling to the tune of ₹2,436 crore. The sector saw net inflows of ₹289 crore in early May, but this reversed sharply with ₹2,725 crore worth of selling in the latter half.

Healthcare sector also bore the brunt of FPI outflows, with ₹2,614 crore exiting the sector. FPI selling in the sector amounted to ₹606 crore in the first fortnight of May, which accelerated to ₹2,008 crore during the second half of the month.

The power sector saw net FPI outflows worth ₹2,494 crore, with ₹720 crore selling in the first half and ₹1,774 crore selling in the second half. Consumer durables with ₹1,734 crore selling, and Realty sector with ₹1,664 crore selling, also witnessed sustained outflows during the month of May.

Mixed Flows in FMCG, Auto, Construction

Fast-moving consumer goods (FMCG) saw a sharp reversal in sentiment — from net outflows of ₹1,057 crore in the first half to a strong inflow of ₹1,872 crore in the second half — taking the monthly total to ₹815 crore.

Automobile and auto components saw marginal net inflows of ₹101 crore, with mixed flows during the month. Construction and construction materials also posted modest inflows of ₹267 crore and ₹575 crore respectively.

Overall FPI Mood: Optimistic But Cautious

The sharply divergent flows highlight that investors are becoming more selective, favouring sectors aligned with structural growth themes like telecom, services, capital goods, and financials, while trimming exposure in defensives or globally exposed sectors like IT and healthcare.

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