After pulling out funds in the past two months, foreign investors invested Rs 7,936 crore in Indian equities in March mainly driven by bulk investment in the Adani Group companies by the US-based GQG Partners.

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However, if one adjusts for the investments of GQG in Adani Group, the net flow is still negative, meaning FPIs have withdrawn money even in March, Sanchit Garg, Co-founder & CEO, GLC Wealth Advisor LLP, said.

According to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, the sustained selling by Foreign Portfolio Investors (FPIs) appears to be over, since they have turned buyers in the last few days.

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"The near-term outlook for FPI looks much more positive now. Even though Indian valuation continues to be relatively high, the recent market correction has made valuations a bit more reasonable than earlier," Vijayakumar said.

Moreover, going ahead, FPIs may not turn aggressive sellers due to domestic factors like an impressive turnaround in the current account deficit (CAD), which has improved substantially due to rising exports.

The CAD which was 4.4 percent in Q2 FY23 has turned into a surplus in Q3 FY23. Therefore, the Indian rupee is likely to be stable, going forward, he added.

According to the data with depositories, FPIs have pumped in a net sum of Rs 7,396 crore in Indian equities in March.

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This came after a net outflow of Rs 5,294 crore in February and Rs 28,852 crore in January. Prior to that, FPIs infused a net amount of Rs 11,119 crore in December, data showed.

In terms of sectors, FPIs have been consistent buyers in capital goods and alternating between buying and selling in the financial services space.

On the other hand, FPIs have pulled out Rs 2,505 crore from the debt market during the period under review. This was pursuant to their investment of Rs 3,531 crore in January and Rs 2,436 crore in February.

Going forward, the outlook is mixed as interventions by governments and central banks globally have stabilised markets, which should have some positive impact on FPI flows in the near term, Manish Jeloka, Co-head of Products & Solutions, Sanctum Wealth, said.

However, this will lead to renewed concerns about inflation down the line, which may lead to outflows at some point over the next few months.

GLC Wealth Advisor LLP's Garg believes that India is better placed compared to other nations and the long-term growth story still stays intact.

Also, India and Indonesia witnessed inflows during the month under review, while the Philippines, South Korea, Taiwan and Thailand saw a net withdrawal.