FPIs keep faith in equities, but Indians hunt for gold

Over 2008-17, while FPIs have put $124 bn in Indian equities, Indians consumed $300 bn worth gold

Foreign investors have invested about $124 billion in Indian equities over 2008-17 and own large stakes in the country’s best companies, says a report. In stark contrast, Indians have “consumed” around $300 billion worth of gold over the same period.

“The next decade will perhaps decide the winner, but we note that foreigners own large stakes in India’s best companies,” said Kotak Institutional Equities in a note.

Foreign portfolio investors (FPIs) own a combined more than 50 per cent in five of India’s top seven banks and financial institutions. “It seems that foreigners have more faith in India's economy (banks are perhaps the most leveraged plays on the same) than Indians,” the report said.

Large gold imports reflect low confidence historically among Indians in government policies and the sharp rise in gold imports up to 2012-13 reflected citizens' concerns about high inflation.