FIIs keep off Indian debt with record sell-off amid coronavirus outbreak

According to market sources, FIIs have also sold Rs 8,000 crore-Rs 10,000 crore worth of debt securities in the shorter-tenure market in March.

Jash Kriplani Mumbai
Over Rs 1.6 trillion debt downgraded by credit rating agencies in August

FIIs are significant players in India’s debt markets, with Rs 4.15 trillion of assets under custody (AUC) belonging to FIIs

The record selling by foreign institutional investors (FIIs) in domestic debt markets is unlikely to reverse in the near term, with experts attributing the net sell-off worth Rs 48,710 crore in 2019-20 to the coronavirus outbreak and global recessionary pressures, which are showing no signs of abating.
“FIIs have been heavily selling in debt markets because they are seeing investor redemption in offshore funds. Amid the spread of coronavirus, leveraged positions have come under pressure,” said Ajay Manglunia, managing director and head of fixed income, JM Financial.
According to the National Securities Depository data, available since 1992-93, FII selling never crossed the Rs 40,000-mark, except in 2018-19, when debt securities worth Rs 42,357 crore were sold.

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First Published: Apr 01 2020 | 8:42 PM IST

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