FPI Leviathan Rises: Primary markets unleash kraken of investment in 2024

Unshackling animal spirits: A record Rs 1.1 trillion in foreign flows via IPOs, QIPs, and rights issues

Investments by foreign portfolio investors (FPIs) have fluctuated throughout the year, remaining negative for five of the 12 months in 2024. By the end of November, year-to-date (YTD) FPI investments had turned negative. However, with a recent revival in foreign flows, 2024 could still mark the second consecutive year of positive FPI investment.

  As of now, YTD FPI flows stand at Rs 25,444 crore. Foreign investments in the primary markets — mainly through initial public offerings, qualified institutional placements, and rights issues — have reached a record Rs 1.1 trillion.

  The previous record for FPI investments in the primary markets was set in 2021, with Rs 78,164 crore. Meanwhile, in the secondary market, FPIs appear to be structurally reducing their exposure to India, having pulled out Rs 54,100 crore since 2018.

  Fortunately, domestic institutions have more than offset these outflows, propelling the equities market higher. As a result, FPIs’ holdings in National Stock Exchange-listed companies dropped to a 12-year low of 17.38 per cent at the end of the April-June 2024-25 quarter.