FPI inflows in Indian shares hit a three-month high in March, NSDL data shows

Foreign portfolio investors have bought INR 2.08 lakh crores of shares in 12 months ending March, the second highest on record, and fuelled a 29% rise in the benchmark Nifty 50 to new all-time highs.

Bengaluru: Overseas inflows into Indian equities rose to a three-month high of Rs 35,078 crore ($4.21 billion) in March, with telecommunication and consumer shares garnering the most interest, data from the National Securities Depository Ltd (NDSL) showed.

Foreign portfolio investors have bought Rs 2.08 lakh crores of shares in 12 months ending March, the second highest on record, and fuelled a 29 percent rise in the benchmark Nifty 50 to new all-time highs.

The Nifty 50 and BSE Sensex rose about 1.6 per cent each last month, as data showing sustained strength in Asia's third-largest economy drove domestic and foreign buying.

"We see the continuity of flows coming in from foreign institutional investors adding to sustained domestic buying, thanks to strong earnings outlook and macroeconomic stability," said Divam Sharma, founder and fund manager of Green Portfolio, PMS (Portfolio Management Services).

Among individual sectors, telecommunication and fast-moving consumer goods (FMCG) stocks saw the most inflows in March, at Rs 7.98 thousand crores and Rs 6.24 thousand crores, respectively.

Telecom major Bharti Airtel surged to a record high during the month, with several analysts identifying the company among the top picks in Indian markets on a strong earnings outlook.

Despite inflows, the FMCG index was muted in March and gained 17.5 percent in fiscal 2024, underperforming the benchmarks.

"While FMCG has underperformed Nifty, we expect gradually improving earnings to trigger re-rating in valuations," said Devender Singhal, executive vice president and fund manager at Kotak Mahindra Asset Management Company.

Data from the last three general elections show that the consumer sector does well post-poll, Singhal added.

FPIs also bought high-weightage financials worth Rs 3.47 thousand crores in March after selling Rs 40 thousand crores in the first two months of 2024. The financials index, which dropped 5 per cent in January and February, rose about 3 per cent last month.