The rebalancing is scheduled to take place on May 12 and the changes will become effective from June 1
Between April 1-24, foreign portfolio investors (FPI) pulled out a net sum of Rs 6,822 crore from equities and Rs 3,525 crore from the debt segment, depositories data showed
IndusInd Bank was added to the so-called 'red flag' list two weeks ago after FPI shareholding crossed 71 per cent
Private sector lender IndusInd Bank has caught the fancy of overseas investors
The issue surfaced after the shareholding pattern disclosed by HDFC showed the People's Bank of China had hiked its stake in the mortgage lender during the March quarter
Market players suggest that the move could be specifically aimed at vetting applicants from China wanting to register as FPIs
Nearly 80 per cent of FPIs coming from Mauritius are currently classified as Category-II
Foreign portfolio investors pulled out Rs 62,000 crore from Indian equities in March
In the previous month, FPIs had withdrawn a record amount of over Rs 1.1 trillion on a net basis from the Indian markets
Move to benefit investors from countries and regions like Mauritius, Cayman Islands who are eyeing Category-I licence
In October, the Indian government had issued a circular raising statutory FPI limit of Indian companies to the sectoral foreign investment limit
But they must look for a cushion of safety when taking long-term positions
Market players said the higher limits have potential to attract billions in overseas flows but it may not play out immediately
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Experts believe foreign investors are withdrawing from riskier assets and are opting for safe heavens like dollar-denominated asset classes and gold
Several market observers said FPIs and other institutional investors have raised concerns regarding difficulty in liquidating their positions in cash and derivatives segment because of this scheme
Prior to this, foreign investors were net buyers for six consecutive months since September 2019
While a coordinated aggressive monetary easing from the central banks is most likely to offer some respite in the near-term, it is unlikely to improve the sentiments
Snapping their six-month buying streak, FPIs pulled out a net Rs 13,157 crore from the Indian capital markets in the first five trading sessions of March as the coronavirus outbreak spooked investors
According to depositories data, FPIs withdrew a net Rs 8,997.46 crore from equities and Rs 4,159.66 crore from the debt segment during March