Foreign Investors Made Net Investment Of INR 14,205 Crore In Indian Financial Services Space

The net investment comes following a net withdrawal of INR 4,686 crore from financial services stocks in October on account of profit booking

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The Indian financial services space seems to be in a safe zone as foreign investors have made a net investment of INR 14205 crore in the respective sector in November amid strong credit growth and manageable non-performing loan portfolio, according to a PTI report.

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According to the report, the net investment comes following a net withdrawal of INR 4686 crore from financial services stocks in October on account of profit booking.

Analysing the data with National Securities Depository Limited (NSDL), it is reportedly stated that, foreign portfolio investors (FPIs) have made a net investment of INR 36,238 crore in the country's equity markets in November. Out of this, the financial services sector invited INR 14205 crore that accounts 39 per cent of total investment made by FPIs in equities.

Manish Chowdhury, head of research at Stoxbox in the news report was quoted as saying, "The financial services sector is coming out of a lean period and is doing well due to a strong uptick in loan growth and manageable non-performing loan portfolio."

"We believe that an expected acceleration in capex spending should ultimately trickle down to enhanced incomes which would open opportunities on a wide range of financing frontiers including housing, vehicle, SME, etc. The margins of these companies should also benefit from low-cost deposits garnered earlier," he further added.

Moreover, he also said that India's outperformance is expected to continue going forward as the US, Europe and China continue to grapple with their own problems including high inflation, possibility of slowdown in economic growth, energy and supply chain imbalances.

According to the report, at the end of November, assets under custody of the financial services sector stood at INR 16.13 lakh crore. After the financial services stocks, fast moving consumer goods (FMCG) emerged as the second most preferred sector with a net investment of INR 3,956 crore. The FMCG sector was followed by information technology at INR 3,859 crore, auto at INR 3,051 crore and oil, and gas sector at INR 2,774 crore.