Foreign Institutional Investors (FIIs) purchased shares worth Rs 84,777 crore and sold equities amounting to Rs 70,553 crore, a net inflow of Rs 14,224 crore ($2.4 billion) from May 2-23, according to data from the Securities and Exchange Board of India.
At the same time, foreign investors have infused a net amount of Rs 12,037 crore ($2.03 billion) in the debt market.
Market analysts said that foreign investors are betting on the new government under the Narendra Modi-led BJP as they see it initiating reforms to spur economic growth.
Given the decisive political mandate, analysts believe that Indian markets have the potential to get more inflows.
FIIs, the main drivers of the equity market, have helped push up the BSE benchmark index, Sensex, by over 10 per cent so far in May.
On the day of election results, May 16, it had shot up about 1,400 points in intra-day trading to cross the 25,000 mark, a record high.
The strong inflows in the recent months have taken the net investment by FIIs to Rs 46,000 crore in Indian equities so far this year, and over Rs 38,000 crore in the debt market during the period taking the total to Rs 84,000 crore.
They had invested Rs 9,602 crore in Indian stocks in April, compared with Rs 20,077 crore in March, Rs 1,404 crore in February and Rs 714 crore in January.
Currently, there are 1,709 registered FIIs in the country, along with 6,418 sub-accounts.