Foreign portfolio investors (FPI) invest Rs 47,334 cr in August so far

Overseas investors remained net buyers in Indian capital markets in August so far, pumping in a massive Rs 47,334 crore on net basis as excess liquidity in the global markets and low interest rates drove money to emerging markets.

According to the depositories data, the equities segment saw a net investment of Rs 46,602 crore while Rs 732 crore was invested in the debt segment by foreign portfolio investors (FPI) in August so far. The total net investment between August 3-28 stood at Rs 47,334 crore.

Prior to this, FPIs were net buyers for two consecutive months. They invested Rs 3,301 crore in July and Rs 24,053 crore in June on net basis. "FPIs have invested over Rs 80,000 crore in equities since April this year.

More than 50 per cent of this investment took place in August itself," Harsh Jain, co-founder and COO at Groww, said.

Rusmik Oza, executive vice-president, head of fundamental research at Kotak Securities said that "FPIs continue to remain net sellers this week in most emerging and Asian markets except India and South Korea".

"On month to date and calendar year to date basis also, FPIs have been sellers in most emerging markets and India has remained an exception." Himanshu Srivastava, associate director - manager research, Morningstar India, said excess liquidity in the global markets and low interest rates have resulted in foreign money to flow into the Indian equity markets, among others.

FPIs have turned their focus towards emerging markets like India also because these markets have been performing well and offer a good potential to generate better returns. Indian equities continue to be attractively valued thus drawing FPI's attention, Srivastava added.

"Recent qualified institutional placement, follow on public offer and initial public offers by many companies have also caused a lot of FPI money to flow into India. They are investing in companies they believe are good picks and are suffering temporarily due to the Covid-19 situation," Jain said. In fact, many bets made in April this year have already resulted in handsome gains for some FPIs, he added.