Foreign Portfolio Investors Pump in Record Sum in Indian Equities in May

Key Highlights :

1. Foreign portfolio investors (FPIs) have invested a net sum of ₹ 43,838 crore in Indian equities in May. This is the highest level of investment by FPIs in the last nine months.

2. Before this, they put in a net sum of ₹ 51,204 crore in equities in August 2022.

3. The March investment was mainly driven by bulk investment in the Adani Group companies by US-based GQG Partners.

4. However, if one adjusts for the investments of GQG in Adani Group, the net flow was negative.

5. In the first two months of the year, FPIs had pulled out over ₹ 34,000 crore.

6. Himanshu Srivastava, Associate Director - Manager Research at Morningstar India, said the latest net inflows are largely driven by the strong domestic macro-outlook, reasonable valuation of the Indian equities, and a good earning season signifying better growth prospects.

7. The sustained buying by FPIs has lifted the NSE benchmark index, Nifty, during the period under review.

8. India attracted the largest investment among all emerging markets, and FPIs were sellers in China.

9. In terms of sectors, financials, automobiles, telecom, and construction are attracting big investments.

10. Apart from equities, FPIs invested ₹ 3,276 crore in the debt market in May.

     Foreign Portfolio Investors (FPIs) have been pumping in record sums into Indian equities in recent months, with May being the highest in nine months. FPIs invested a net sum of ₹ 43,838 crore in the Indian equities in the entire month of May, the highest level of investment by FPIs in the last nine months. This comes following a net infusion of ₹ 11,630 crore in equities in April and ₹ 7,936 crore in March. The sustained buying by FPIs has lifted the NSE benchmark index, Nifty, during the period under review.

     The latest net inflows are largely driven by the strong domestic macro-outlook, reasonable valuation of the Indian equities, and a good earning season signifying better growth prospects. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said that inflow by FPIs will continue in the current month since the latest GDP data and high-frequency indicators reflect a robust economy gaining further strength.

     In terms of sectors, financials, automobiles, telecom, and construction are attracting big investments. Apart from equities, FPIs invested ₹ 3,276 crore in the debt market in May. So far in 2023, foreign investors have put in ₹ 35,748 crore in the Indian equities and ₹ 7,471 crore in the debt market.

     Interestingly, India attracted the largest investment among all emerging markets, and FPIs were sellers in China. With the Indian economy showing signs of strength, FPIs have continued to show confidence in the Indian equity market. This is expected to further boost investor confidence and encourage more foreign investment in the Indian markets.

     It is important to remember that investing in the stock market involves risk and investors should be aware of the risks associated with their investments. It is also important to diversify one’s investments and not put all eggs in one basket. It is also advisable to consult a financial advisor before investing in the stock market.

     Foreign Portfolio Investors have been showing confidence in the Indian equity market and have pumped in record sums in the recent months. This is a positive sign for the Indian economy and is expected to further boost investor confidence and encourage more foreign investment in the Indian markets.

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