FPI inflows cross $40-billion mark

Encouraged by recent government-backed reforms and the hope of a strong revival in India's growth, foreign investors have pumped in more than $40 billion into the Indian equities and debt markets till now, data showed Wednesday.

According to data with the National Securities Depository Limited (NSDL), the Foreign Portfolio Investors (FPIs) infused $41.41 billion into the debt and equities market.

The foreign institutional investors (FIIs) along with sub-accounts and qualified foreign investors have been clubbed together by market regulator Securities and Exchange Board of India (SEBI) to create a new investor category called FPIs.

The NSDL takes a period of one day to update the trading trends. This is the first time after 2010 that the country has witnessed such a robust in-bound flow. In 2010, the India attracted a net investment of $39.38 billion.

This year, the mark was overtaken even before the year ended. With strong fundamentals and expectations of more reforms the foreign investors have been gulled to the Indian markets.

The FPIs have invested heavily into the debt market with an exposure of $25.01 billion, while $16.40 billion have been poured into the equities markets.

Due to the upsurge in equity investment the benchmark index has reported gains of over 33 percent. On Nov 28, the 30-scrip Sensitive Index (Sensex) of the S&P Bombay Stock Exchange (BSE), benchmark index of Indian hit a record high of 28,822.37 points, surpassing its previous high of 28,541.22 it touched Nov 25.

On the equities front, the week ended Nov 28 saw the FPIs picking-up stocks worth Rs.2,975.48 crore or $480.89 million.

The FPI's previous week inflows into the equities was in contrast to their investments in week ended Nov 21, when they purchased about Rs.1,675.75 crore or $271.65 million in stock.

On a week-on-week basis, the foreign equities inflow had zoomed by 77.56 percent at Rs.2,975.48 crore reported for the week ended Nov 28 from Rs.1,675.75 crore in the previous week ended Nov 21.

The FPIs had invested Rs.1,938.09 crore or $312.97 million in the Indian equities markets on Dec 3.