Foreign investors turn net buyers in April after three-month exodus; here's why

Foreign institutional investors (FIIs) turned net buyers in the Indian equity markets for the first time since start of this year in April, data from the National Securities Depository Limited (NSDL) showed. FIIs bought shares worth ₹4,223 crore in April after they sold stocks worth ₹1,16,574 crore in first three months of 2025.

One of the key reasons for FIIs turning net buyers is drop in the dollar index and subsequent rise in rupee against US dollar. Dollar index dropped below 100 after hitting high of 110 earlier this year.

The rupee appreciated 77 paise to 83.77 against the US dollar in early trade on Friday, supported by sustained foreign fund inflows and stronger domestic data.

Meanwhile, strong demand for Indian equities emerged soon after US President Donald Trump announced 90-day pause in reciprocal tariffs. Optimism surrounding a trade deal with the United States is also leading to FIIs piling up on Indian stocks.

“In Indian democracy, it’s got to go through the prime minister and the parliament, we can’t just do that, but we’re moving in Trump time, which is to say as fast as possible,” Navarro told CNBC’s ’Squawk on the Street.′

Q4 earnings boost

Strong earnings reported by most of the NIFTY50 companies in March quarter amid attractive valuations after sharp market correction that started in October last year is also leading to FIIs maintain their positive stance on India, analysts said.

Earnings reported by NIFTY50 companies in the fourth quarter of financial year 2024-25 have so far been in-line with estimates or exceeded estimates. Earnings reported by Adani group companies Adani Ports and Adani Enterprises surpassed street estimates on Thursday leading to surge in both the shares. Adani Ports shares rose as much as 5.60% and Adani Enterprises advanced as much as 2.72%.

Adani Ports and SEZ, the country's largest private port operator, on Thursday, May 1, reported a net profit of ₹3,014 crore for the January-March quarter (Q4 FY25), marking an increase of 48% from ₹2,040 crore logged in the same period last year.

Its revenue from operations rose 23% to ₹8,488 crore in the March quarter, as against ₹6,896.50 crore registered in the year-ago period.

Adani Ports' operating profit, also known as earnings before interest, taxes, depreciation, and amortisation (EBITDA), rose 21% to ₹4,966 crore as against ₹4,102 crore in the same period last year.

Adani group's flagship company Adani Enterprises reported a net profit of ₹3,845 crore in the January-March quarter, marking an increase of 752% from ₹451 crore logged in the same period last year. The sharp jump in profit came on the back of an exceptional gain of ₹3,945.73 crore resulting from stake sales in Adani Wilmar (now known as AWL Agri Business).

Its revenue from operations, however, declined 7% to ₹27,601.64 crore as against ₹29,630 crore seen in the year-ago period.