FIIs infuse Rs 12,000 cr in Indian capital markets in a week

Buy shares worth Rs 4,702 crore, debt worth Rs 7,059 crore

Overseas investors have pumped in nearly Rs 12,000 crore in Indian capital markets in the first week of this month following certain measures taken by financial sector regulators.

The latest inflow takes the investment to more than Rs 45,000 crore ($7.35 billion) so far in 2015.

Foreign Institutional Investors (FIIs) bought shares worth Rs 4,702 crore ($761 million) between February 2 and 6, while they bought debt worth Rs 7,059 crore ($1.14 billion), taking the total investment to Rs 11,760 crore ($1.9 billion), latest data with Central Depository Services Ltd (CDSL) showed.

These investors got re-christened as FPIs or Foreign Portfolio Investors last year under a new regulatory regime that promises to make it easier for them to invest in India.

Of the total inflows, most of the investment was accounted by debt markets, which analysts attributed to measures taken by RBI and Sebi to attract long-term overseas investors.

RBI and Sebi last week amended their norms for foreign portfolio investments, asking them to make their future investments only in corporate bonds with minimum residual maturity period of three years.

However, there would be no lock-in period and FPIs would be able to sell the securities to domestic investors.

Besides, FPIs are allowed to invest their coupons received on investments in government securities back into such bonds. These investments would be allowed even after the FPIs having fully utilised the applicable limits of $30 billion.

In 2014, the net investment by overseas investors into the debt markets was Rs 1.16 lakh crore, while in equities it stood at Rs 98,150 crore.

Overall, net investment by foreign investors stood at Rs 2.58 lakh crore in 2014.