FPI OUTFLOW NEARS ₹1 LAKH CR MARK IN 2018

NEW DELHI: Foreign investors’ portfolio investments have long been known as ‘hot money’ that comes in fast but can go out even faster and it is the outward journey that seems to be the underlying theme for the Indian capital markets as 2018 draws to a close, with net outflows nearing the ₹1 lakh crore mark.

This could make 2018 the worst year in terms of foreign portfolio investments in the Indian capital markets and follows a record net inflow of about ₹2 lakh crore into equities and debt securities in 2017, as per data available with the depositories and exchanges.

As of now, the foreign portfolio investors (FPIS) have made a net withdrawal of about ₹87,000 crore from the Indian markets with about a fortnight of trading remaining.

Analysts warn the trend may continue in the wake of negative sentiments about possible changes in the regulatory framework after the sudden exit of the RBI governor and the emerging political scenario. Marketmen feel FPIS have stamped their influence very strongly this year after their stiff resistance to proposed changes in norms for recording beneficiary ownership of their funds forced regulators to have a re-think and eventually change the rules.

FPIS are among the largest shareholders in several listed blue-chips in India, especially in the banking and financial services sectors, while their overall average holding of listed Indian companies is estimated at around 25%.