Domestic Funds Witness Highest Inflows Since April 2020

DIIs Inflow: The total inflow for the month amounted to $6.8 billion, representing a substantial surge and reaching its peak since April 2020

DIIs Inflow: In terms of sectors, Capital Goods saw the highest increase of 6 per cent, followed by Automobiles with 5 per cent

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Domestic Institutional Investors (DIIs) witnessed a sustained upward trend in inflows for the eighth consecutive month, marking a notable milestone in March 2024, reported Motilal Oswal Financial Services on Wednesday. The total inflow for the month amounted to $6.8 billion, representing a substantial surge and reaching its peak since April 2020.

In March 2024, Foreign Institutional Investors (FIIs) also reported robust inflows amounting to $4 billion. The cumulative inflows from FIIs into Indian equities for the year-to-date period in 2024 reached $1.4 billion, a notable figure compared to the substantial inflows of $21.4 billion recorded in the corresponding period of the previous year. On the other hand, DIIs maintained a steady inflow into equities in the year-to-date period of 2024, totalling $13.1 billion, although slightly lower than the $22.3 billion recorded during the same period in 2023.

The Nifty reached a new peak of 22,527 points in March 2024, marking a significant milestone. It concluded the month with a 1.6 per cent increase compared to the previous month, settling at 22,327 points. This marks the second consecutive month of gains for the index, according to the brokerage.

Significantly, the index displayed considerable volatility, fluctuating by approximately 816 points throughout the trading period before settling 344 points higher. Year-to-date, the Nifty has experienced a 2.7 per cent increase. Over the past 12 months, midcaps and small caps have demonstrated impressive gains of 60 per cent and 70 per cent, respectively, whereas large caps have seen a more modest increase of 29 per cent. Looking back over the past five years, midcaps have surpassed large caps by 71 per cent, and small caps have outpaced large caps by 37 per cent.

Sector Wise Growth:

In terms of sectors, Capital Goods saw the highest increase of 6 per cent, followed by Automobiles with 5 per cent, Metals with 4 per cent, Infrastructure with 3 per cent, and Private Banks with 2 per cent. On the other hand, Media experienced the most significant drop of 12 per cent, while Technology fell by 7 per cent, and Real Estate was slightly down by 1 per cent, as per the brokerage firm.

Firm Wise Growth:

Bajaj Auto had the best performance with a 16 per cent increase, followed by Maruti Suzuki and Bajaj Finance, both up by 12 per cent. Hindalco and Tata Steel also performed well, each gaining 11 per cent. On the other hand, Infosys saw the biggest drop with an 11 per cent decrease, followed by Tata Consumer with an 8 per cent decline. Wipro, HCL Tech, and LTIMindtree were also among the major losers, each experiencing a 7 per cent decrease, according to the brokerage.

The Nifty is currently trading at a 12-month forward P/E ratio of 19.4x, which is close to its long-term average (LPA) of 20.3x. However, the broader markets are showing higher valuations, with the NSE Midcap 100 index trading at a premium of 46 per cent compared to the Nifty.