FPIs net buyers in first half of Feb, pour Rs 24,617 cr in Indian markets

Foreign investors remained net buyers in the first half of February by investing a net sum of Rs 24,617 crore in the Indian markets due to positive sentiments post-Budget and the central bank's decision to maintain an accommodative stance in its recent monetary policy review.

As per the depositories' data, Foreign Portfolio Investors (FPI) pumped in a net sum of Rs 10,426 crore into equities and Rs 14,191 crore into the debt segment between February 3 and 14. This adds up to a total net investment of Rs 24,617 crore.

FPIs have been net buyers in the Indian markets since September 2019, the data showed.

"The recovery in the markets post-Budget has largely been supported by DIIs (domestic institutional investors)," Ajit Mishra, vice-president (research) at Religare Broking Ltd, said.

Finance Minister Nirmala Sitharaman in the Union Budget proposed to remove dividend distribution tax (DDT) on companies and, henceforth, the tax burden will be shifted to recipients at the applicable rate.

Besides, she also said certain government securities will be open for foreign investors adding that the Centre plans to increase investment limit for FPIs in corporate bonds from 9 per cent to 15 per cent.

However, the buying in equities has been nominal in February so far as "the subdued FPI sentiments are a result of coronavirus outbreak's impact on global economic growth," Mishra said.

Citing reasons for investment in the bonds market, analysts said the investment was largely on the back of the RBI maintaining an accommodative stance in its recent monetary policy review.

On the future course of FPI flows, Mishra said that "in the medium term, FPI flows should increase as the domestic economy rebounds and global concerns subside".



Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel