FPIs Invest INR 22000 Crore In July First Week Apart from equities, overseas investors put in INR 1,557 crore in the Indian debt market during the period under review
By Teena Jose •
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Foreign portfolio investors (FPIs) continue to invest in Indian equities with a net infusion of nearly INR 22000 crore within the first week of July due to resilience of the domestic economy amid an uncertain global backdrop, according to a PTI report.
V K Vijayakumar, chief investment strategist at Geojit Financial Services reportedly said that, if this trend continues, investment by FPIs in July will exceed the figures recorded in May and June, which were INR 43,838 crore and INR 47,148 crore, respectively.
Before March, overseas investors pulled out inr 34,626 crore collectively in January and February. Kotak Securities' Chouhan said that India's emergence as a strong growth-oriented market over others provides major confidence to overseas investors, as per the report.
"With the revival in monsoon in many parts of the country coupled with expectations of relatively better-than-expected corporate earnings in the first quarter, overseas investors have been increasing exposure to Indian equities," he added.
Apart from equities, overseas investors put in INR 1,557 crore in the Indian debt market during the period under review. With the latest inflow, investment by FPIs into Indian equities has reached INR 98,350 crore and INR 18,230 crore in the debt markets so far this year, added the report.
In terms of sectors, FPIs have been steadily buying financial services, automobiles, capital goods, and construction. Recently, they have stepped up buying in FMCG and power. On the other hand, the selling trend in IT continues.
Regarding this development, Sathvik Vishwanath, co-founder and CEO, Unocoin, has commented that, "The remarkable increase in foreign portfolio investment (FPI) in Indian equities can be attributed to a combination of factors that make India an attractive investment destination. First and foremost, India's strong economic growth potential stands out, fueled by its growing consumer base and thriving digital economy. These factors offer investors the promise of high returns. In addition, ongoing reforms such as the introduction of the Goods and Services Tax (GST) and improved ease of doing business have significantly boosted investor confidence. India's stable political environment, along with the government's commitment to economic liberalization, has further increased its attractiveness to foreign investors."
He further added, "The Indian government's focus on developing infrastructure, establishing smart cities and expanding renewable energy projects has created attractive investment prospects. These initiatives not only represent long-term growth potential, but are also in line with global sustainability trends. Additionally, the accommodative monetary policy and consistent liquidity support by the Reserve Bank of India have boosted investor sentiment and market stability."
According to him, in a nutshell, the combination of India's growth potential, ongoing reforms, stable political environment and infrastructure development has fueled the surge in FPI investment in Indian equities.
Ravi K. Ranjan, the founder of Super Angels Summit 2023 and an Angel Investor Evangelist, has shared his perspectiver over this FPI surge that, "The increasing FPI investments in Indian equities can be attributed to the country's strong economic growth, favorable demoraphcics, economic reforms, infrastructure development, political stability, and investor friendly policies. These are combined with a range of investment options and a conducive investment climate that has successfully positioned India as a compelling choice for foreign investors seeking opportunities in a dynamic and rapidly growing market."
He also asserted, "With the ongoing focus on infrastructure development, digitization, and innovation, India has created opportunities across sectors, including technology, manufacturing, and renewable energy. FPIs are attracted to the growth potential offered by these sectors as they align with global trends and present long-term investment prospects."
