FPIs invest Rs 43,838 crore in Indian equities in May, highest in 9 months

Foreign Portfolio Investors (FPIs), acting on strong macroeconomic fundamentals and reasonable valuations, pumped in Rs 43,838 crore in Indian equities in May, the highest in nine months.

FPIs have continued the buying stance in June, too, investing Rs 6,490 crore in just two trading sessions of the month, data with the repositories showed.

VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said FPIs’ inflow will continue in June since the latest GDP data and high-frequency indicators reflect a robust economy gaining further strength.

Before Rs 43,838 crore recorded in May 2023, FPIs put in a net sum of Rs 51,204 crore in equities in August 2022, data showed.

Also read: India’s economy likely to grow in 6.5-6.7% range in FY24: CII president

Sudden spurt

The May spurt came following a net infusion of Rs 11,630 crore in equities in April and Rs 7,936 crore in March.

The March investment was mainly driven by bulk investment in the Adani Group companies by US-based GQG Partners. However, if one adjusts for the investments of GQG in Adani Group, the net flow was negative.

Moreover, in the first two months of the year, FPIs had pulled out over Rs 34,000 crore.

Himanshu Srivastava, Associate Director, Manager Research at Morningstar India, said the latest net inflows are largely driven by the strong domestic macro-outlook, reasonable valuation of the Indian equities, and a good earning season signifying better growth prospects.

Also read: Promising GDP data boost markets, rupee 

Nifty goes up

The sustained buying by FPIs has lifted the NSE benchmark index, Nifty, during the period under review.

Interestingly, India attracted the largest investment among all emerging markets, and FPIs were sellers in China.

In terms of sectors, financials, automobiles, telecom, and construction are attracting big investments.

Apart from equities, FPIs invested Rs 3,276 crore in the debt market in May.

So far in 2023, foreign investors have put in Rs 35,748 crore in the Indian equities and Rs 7,471 crore in the debt market.

(With agency inputs)