A standout market: Marquee share sales help India gain highest FII flows

India has garnered the highest foreign institutional investor (FII) flows on the month-to-date, quarter-to-date, and also year-to-date bases. While most emerging markets (EMs) have seen outflows, the overseas investment into the domestic equities markets is nearing the $1-billion mark for the quarter.
 

So what has made India the standout market? The answer is large share sales by marquee listed companies, particularly in the financial space. While overall FII sentiment has been positive, thanks to the low interest rate regime, India has managed to bag more than its fair share of overseas flows because of record capital raising by listed firms.

 

So far this quarter, 12 firms have mopped up $9.4 billion, while on a year-to-date basis, the Indian market has seen equity share sales worth more than $26 billion. Only a portion of this has happened outside the stock exchange platform, which reflects in the FII flow number. If one considers, investments in share sales, such as qualified institutional placements, the FII flow tally would look even bigger.