FPIs’ Holding In Indian Equities Reach $738 Billion In Q3, Value Rises 13 Per Cent YoY

The FPIs’ share in the domestic equity market slipped marginally during the October-December quarter in FY24 to 16.83 per cent, from 16.95 per cent in the previous quarter in the same fiscal.

Foreign Portfolio Investors’ (FPIs) holding in Indian equities touched $738 billion in the third quarter ended December 2023, helped by the stock market’s robust performance, a study by Morningstar revealed. 

The holding value during the period marked a jump of 13 per cent over the preceding September quarter when investments by FPIs reached $651 billion, reported PTI. The value of these investments increased 26 per cent from $584 billion clocked in the third quarter in the previous fiscal year. 

The report credited the growth to a strong trend seen in domestic equities and a robust influx of funds from investors. At the same time, the FPIs’ share in the domestic equity market slipped marginally during the October-December quarter in FY24 to 16.83 per cent, from 16.95 per cent in the previous quarter in the same fiscal. 

The investors took out $5.38 billion from the equities market in the second quarter of FY24, and turned into net buyers at $6.07 billion in the period under review, due to a fall in the US Treasury bond yields. 

Initial public offering listings and a reduction in crude prices also enticed investors back into the domestic market. The report stated that the Bharatiya Janata Party’s win in three major state elections helped stabilise the political climate and generated a favourable environment for investors. 

Further, the Indian economy fared much better against similar economies and this helped make a lucrative environment for the investors, the report said. However, it added, that this growth momentum couldn’t be sustained and FPIs sold Indian equities worth $3.10 billion in January 2024. 

“Moreover, cautiousness has continued to prevail so far in February. The Indian equity markets touched all-time high levels in January, which led FPIs to book some profits. Moreover, uncertainty over the interest-rate scenario led them to stay on the sidelines and wait for further cues before investing in emerging markets like India. Heavy selling by FPIs was also triggered by them offloading their stake in HDFC Bank given its disappointing quarterly results,” the report stated.