FPIs inject almost 31k crore in Indian equities in May

The investments were driven by robust macroeconomic fundamentals, the prospect of interest rate cuts, positive earnings expectations, and declining stock valuations

May 22, 2023

Net inflows by Foreign Portfolio Investors (FPIs) reached INR 16,365 crore in 2023

In March and April 2023, FPIs infused INR 7,936 crore and INR 11,630 crore, respectively

FPIs withdrew over INR 34,000 crore in the first two months of 2023

FPIs also made significant purchases in the financial sector, investing INR 8,382 crore

Foreign Portfolio Investors (FPIs) added INR 30,945 crore into Indian equities in May 2023 so far, driven by robust macroeconomic fundamentals, the prospect of interest rate cuts, positive earnings expectations, and declining stock valuations.

According to data from the depositories, net inflows by FPIs have reached INR 16,365 crore in 2023.  This follows a net infusion of INR 11,630 crore in April and INR 7,936 crore in March, which was primarily driven by a substantial investment in Adani Group companies by the US-based GQG Partners. 

Additionally, FPIs withdrew over INR 34,000 crore in the first two months of the year. Experts attribute the inflows into Indian equities to the Reserve Bank of India’s (RBI) decision to pause rate hikes. The projection of strong Indian corporate earnings growth and the recent decrease in Indian equities, which are currently trading at a lower price-to-earnings ratio compared to historical averages, have also contributed to the surge in FPI investments, according to the experts.

Furthermore, India’s GDP growth is expected to be 7.5% in 2023-24, surpassing the global average. Coupled with low inflation and a current account surplus, this makes India an appealing investment destination.

In addition to equities, FPIs have invested INR 1,057 crore in the debt market thus far in May 2023. They have consistently been buyers in various sectors, including automobiles and auto components, capital goods, FMCG, healthcare, telecom, real estate, and oil & gas.

During the mentioned period, FPIs also made significant purchases in the financial sector, investing INR 8,382 crore.

Source: Business Standard

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