Indian inventory market: Overseas portfolio traders (FPIs) are relentlessly promoting within the Indian inventory market. In 2025, FPIs remained web sellers within the Indian inventory market by promoting out Indian shares price round ₹2,27,500 crore within the money phase. Nonetheless, they’re betting excessive within the major market. In keeping with the NSDL knowledge, collective funding of offshore funds within the Indian anchor books of the preliminary public choices (IPOs) surged threefold in FY25 to round ₹26,500 crore, threefold towards the earlier monetary 12 months.
In keeping with inventory market consultants, this twin behaviour of FPIs may be attributed to numerous causes, however a significant factor amongst them is the overpriced Indian secondary market compared to the Indian major market. They mentioned that FPIs will not be within the temper to simply accept market-driven shares as they need a prioritised deal the place they will affect phrases, timing, and construction relatively than settle for market-determined pricing in secondary transactions.
Overpriced Indian inventory market
Pointing in direction of the overpriced Indian inventory market towards IPOs, Anuj Gupta, Director at Ya Wealth, mentioned, “The Indian inventory market appears to be like overpriced in comparison with different rising markets. The MSCI India index trades at a P/E a number of of 25.4, in comparison with the MSCI Rising Market Index, which incorporates India, with a P/E a number of of 15.41. The MSCI China index trades at a P/E a number of 14.6, whereas the MSCI Korea index is 12.4x.”
“Even the 50% Trump tariffs on Indian exports haven’t led to any vital correction out there, stopping traders from getting into cheaply. In such a state of affairs, IPOs supply a greater play for the Indian markets as managements and bankers worth the problem attractively, drawing vital investor curiosity,” Anuj Gupta added.
On what’s fueling FPIs’ confidence within the Indian major market forward of the direct equities, Avinash Gorakshkar, a SEBI-registered elementary analyst, mentioned, “The regular demand from home institutional traders has deepened fairness markets and improved liquidity, giving FIIs the boldness to take part in IPOs with out worrying about getting trapped.”
IPO providing prioritised deal?
“By investing in IPOs as an alternative of shares, FPIs prioritise offers that may affect phrases, timing, and construction relatively than accepting market-determined pricing in secondary transactions. The choice for anchor positions in IPOs supplies traders with allocation certainty, beneficial pricing, and lock-up intervals that align with their portfolio administration methods,” mentioned Avinash Gorakshkar, including, “FPIs’ promoting within the secondary market may be anticipated when the first market fizzles out and the stream of IPOs dries.”
Disclaimer: This story is for academic functions solely. The views and suggestions expressed are these of particular person analysts or broking companies, not Mint. We advise traders to seek the advice of with licensed consultants earlier than making any funding choices, as market circumstances can change quickly and circumstances could fluctuate.
