Boost Your Investment Game! FPIs Pour in ₹43,838 Crore in May.
Foreign Portfolio Investors (FPIs) have injected a substantial amount of Rs 43,838 crore into the Indian stock market in May, marking the highest level of investment in nine months. This surge in investment can be attributed to the robust macroeconomic fundamentals and reasonable valuations prevailing in the country.
The trend of FPIs displaying a buying stance has continued into June, with a significant infusion of Rs 6,490 crore in just two trading sessions, as reported by repositories. VK Vijayakumar, the Chief Investment Strategist at Geojit Financial Services, predicts that the inflow of FPIs will persist throughout the current month. This projection is based on the latest GDP data and high-frequency indicators, which reflect a robust economy gaining further strength.
According to the data, FPIs made a net investment of Rs 43,838 crore in Indian equities throughout the entire month of May. This marks the highest level of investment by FPIs in the past nine months. Previously, in August 2022, they had invested a net sum of Rs 51,204 crore in equities. In April, there was a net infusion of Rs 11,630 crore, followed by Rs 7,936 crore in March. However, it should be noted that the March investment was primarily driven by a bulk investment in Adani Group companies by US-based GQG Partners. Adjusting for GQG's investments in Adani Group, the net flow was negative.
Furthermore, in the first two months of the year, FPIs had withdrawn over Rs 34,000 crore. Himanshu Srivastava, Associate Director and Manager of Research at Morningstar India, believes that the recent net inflows can be attributed to the strong domestic macro-outlook, reasonable valuation of Indian equities, and a positive earnings season indicating better growth prospects.
The consistent buying activity by FPIs has propelled the NSE benchmark index, Nifty, during the reviewed period. Notably, India has attracted the largest investment among all emerging markets, while FPIs have been sellers in China.
In terms of sectors, significant investments are being made in financials, automobiles, telecom, and construction.
In addition to equities, FPIs have also invested Rs 3,276 crore in the debt market in May.
So far in 2023, foreign investors have infused Rs 35,748 crore in Indian equities and Rs 7,471 crore in the debt market.