FPIs Pump $33.8 Billion so far this Fiscal, Holds at Record $592.5 Billion

Foreign portfolio investors (FPIs) have pumped in $33.8 billion into domestic equities and debt, till February 15 this FY. This is the highest since FY15 when the FPIs investment stood at nearly $46 billion, taking their net outstanding investments to a record $592.5 billion, as per a report.

Of the total FPI assets of $592.5 billion, $537.4 billion were in equities and $51.38 billion in debt, according to the data collated by Care Ratings, reports PTI.

The maximum holdings is in financial services sector at $191.3 billion, followed by software ($76.1 billion), oil & gas ($50 billion), automobiles & auto components ($26.9 billion, pharmaceuticals & biotechnology ($22.8 billion), sovereign ($21.7 billion--debt), household & personal products ($20.2 billion), capital goods ($19.8 billion), food, beverages & tobacco ($15.7 billion) and insurance ($13.4 billion).

These sectors account for around 78 percent of total assets under FPI custody. The report said that of the close to $34 billion inflows this fiscal so far, as much as $8.4 billion came in December alone.

According to Care data, net FPI inflows were negative in both FY19 as well as in FY20. In FY20 the net inflows were at negative $3 billion after the bloodbath in the markets following the announcement of the coronavirus as a global pandemic in March last year, leading to a 35 percent plunge in the markets in that month alone.

After hitting an all-time high of $45.7 billion in FY15, net FPI investments have been fluctuating between positive and negative territories, with FY16 seeing a net pullout to the tune of $2.5 billion. However, another major pullout of $5.5 billion in FY20, according to the data collected by Care Ratings.

Investments from the US account for 34 percent of the total assets under custody. Mauritius follows next with 11 percent, while Singapore (8.8 percent), Britain (5.3 percent), Ireland (4 percent), Canada (3.4 percent), Japan (2.8 percent) and the Netherlands and Norway with a share of 2.4 percent each.

Together, these countries account for 83 percent of total FPI assets under custody.

In terms of equity, investors from the US account for nearly 37 percent of the total, followed by Mauritius with a share of 11 percent.

Singapore accounts for 29 percent of the total debt investments followed by the Luxembourg at 11 percent.

Singapore and US account for a major proportion of hybrid investment with a share of 41 percent and 28 percent, respectively.

When it comes to the strong correlation between FPI flows and movements in the stock indices, it can be noted that $1 billion inflow over a period of three months can increase the Sensex by 1.6 percent.