FPI invested Rs 51,000 crore in the market in 2021, further growth is expected
Foreign investors invested Rs 26,001 crore in equities, Rs 23,222 crore in debt or bond markets and Rs 1,848 crore in hybrid instruments.
FPI investment in India for the third consecutive year
Foreign portfolio investment (FPI) in the Indian market stood at over Rs 51,000 crore during 2021 on account of excess global liquidity and other factors. Foreign investors remained net buyers in the domestic stock market for the third year in a row, and this trend is expected to continue. Experts believe that with the global financial system still laden with liquidity, emerging markets may remain the preferred investment destination for several months to come.
FPI investment decreased compared to 2020
During the year 2021, the economy appeared to be slowly coming back on track and due to the hope raised by this, FPIs became net buyers. His investment this year, however, is much less as compared to Rs 1.03 lakh crore in 2020. Significantly, in 2019, FPIs had invested Rs 1.35 lakh crore. FPIs made net investments in the first three months – January, February, March – this year. Similarly, he remained a net investor in June, August and September. The remaining six months saw net selling by FPIs.
Foreign investors invest more in shares
The depository data shows that foreign investors invested Rs 26,001 crore in equities, Rs 23,222 crore in debt or bond markets and Rs 1,848 crore in hybrid instruments. On the relatively low FPI inflows this year, Julius Baer’s Executive Director Milind Muchhala said it was due to the strengthening of the dollar index and profit-booking. Himanshu Srivastava, Associate Director – Manager Research, Morningstar India said that FPI inflows were driven by stimulus measures announced by central banks and excess liquidity in the global financial system. Became negative about India and many foreign brokerages have shifted India from ‘overweight’ to ‘neutral’ category
Investors attracted by high returns in the market
The inclination of foreign investors towards India is due to the high returns they are getting in the stock market. The market rally, which started from mid-2020, continues. And in the year 2021, the market reached a new high. At present, correction is being seen in the market. But still there is no major decline in the stock market. For this reason, despite reaching the upper levels, there is a continuation of the arrival of investors in the market, as well as due to the high returns in the primary market and the long line of new companies, foreign investors are also positive about India.