FPI INVESTMENT IN EQUITY RISES 7% TO $552B IN MARCH QUARTER

New Delhi, May 13: The value of foreign portfolio investor (FPI) holdings in domestic equities reached $552 billion in three months to March 2021, a surge of 7 per cent from the preceding quarter, according to a Morningstar report.

This was largely on the back of robust net inflows from FPIs, coupled with a strong performance of the Indian equity markets. “As of the quarter ended March 2021, the value of FPI investments in Indian equities stood at $552 billion, which was considerably higher than the $518 billion recorded in the previous quarter,” the report noted.

As of March 2020 quarter, the value of FPI investments in Indian equities was $281 billion.

However, the contribution of overseas investors to domestic equity market capitalisation dropped marginally during the period under review to 19.9 per cent from 20.1 per cent in the December quarter.

Offshore mutual funds form an important component of total foreign portfolio investment, apart from other large FPIs, such as offshore insurance companies, hedge funds, and sovereign wealth funds.

During January-March 2021, FPIs invested a robust $7.64 billion in Indian equities. In relative terms, it was much lower than the net inflows of $19.21 billion recorded in the previous quarter, but in absolute terms, it is a significant amount, nonetheless, the report pointed out.

According to the report, positive domestic and global factors ensured that the interest of foreign investors in the Indian equity markets remains intact.