Chart view: Which sectors did foreign investors pour money into in 2023?

Foreign portfolio investors invested heavily in financial and industrial stocks in December 2023, followed by consumer discretionary and IT stocks, shows data analysed by Kotak Institutional Equities. In the calendar year 2023, financials saw FPI net flows of $6012 million and industrial stocks saw flows of $7127 million. 

Country allocations. Allocations to China and India constitute 45% of the average Asia ex-Japan fund portfolio. Asia ex-Japan funds’ allocations to India increased to 19.2% in December from 18.7% in November, whereas allocations to India by Global Emerging Market funds( GEM) increased sharply to 17.5% in December from 16.6% in November.

Largest quantum of FPI AUC comes from US-based investors

FPI AUC of top-five countries investing in India, March fiscal year-ends, 2020-24 (US$ bn)

Allocations by Asia ex-Japan non-ETFs to India increased to 19.7% in December from 19.2% in November; allocations to India by GEM non-ETFs increased to 15.9% in December from 15.1% in November, as per the Kotak report.

Fund allocations to India by GEM funds increased sharply to 17.5% in December from 16.6% in November

Listed funds witnessed inflows of $2 billion in December 2023,  completely led by ETF inflows. India-dedicated funds witnessed inflows of $3.1 billion, broken down into $2 billion of ETF inflows and $1.1 billion of non-ETF inflows, whereas GEM funds saw $247 million of outflows.

India EPFR fund flows and AUM broken down into different geo-focus funds and investment styles (ETF/non-ETF)

Disclosure: Entities controlled by the Kotak family have a significant holding in Business Standard Pvt Ltd