Foreign portfolio investors (FPIs) pumped Rs 50,471 crore into the Indian stock and debt markets in March so far despite the high volatility in the stock markets.
According to NSDL data, FPIs bought stocks worth Rs 40,710 crore during the month and invested Rs 10,383 crore in the debt market. They pulled out Rs 857 crore from the debt-VRR category and invested Rs 235 crore in hybrid.
However, as the FPI stock investment includes the BAT decision to sell stocks worth over Rs 16,000 crore which were bought by FPIs, the net investment figure is not a true indicator of the FPI activity.
FPIs were big sellers in January and modest buyers in February. “But in March they have turned big buyers. But this figure includes some bulk deals executed through the stock exchanges and, therefore, is not a true indicator of FPI activity. However, the rising trend of FPI investment continues,” said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
An important feature of FPI investment for many months now has been its erratic nature. FPIs have been changing their strategy in response to the changes in the bond yields in the US. “Therefore, now that US bond yields have again spiked up in response to stubborn inflation, FPIs may again turn sellers in some of the days, going forward,” he said.
An important trend in the market in March is the weakness in the mid and small caps and the resilience in large caps. This persuaded FPIs to reduce selling in large caps and even buying in limited quantities in sectors like banking, telecom and automobiles, analysts said.
Small and mid-cap stocks fell last week following the Securities and Exchange Board of India’s (SEBI’s) caution against excessive speculation in these stocks.
Meanwhile, the SEBI has exempted certain FPIs from the additional disclosure framework.
The Sebi Board on Friday approved a proposal to exempt additional disclosure requirements for FPIs having more than 50 per cent of their India equity AUM in a single corporate group, in case the concentrated holdings of the FPIs are in a listed company with no identified promoter, if the certain conditions are met.
In a circular in August 2023, Sebi had asked select FPIs to provide granular details regarding their beneficial ownerships, economic interest and control up to the level of all natural persons. These were FPIs, who held more than 50 percent of their Indian equity Assets Under Management (AUM) in a single Indian corporate group and those that individually or along with an investor group held more than Rs 25,000 crore of equity AUM in Indian markets.
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First uploaded on: 18-03-2024 at 04:51 IST