FII assets in India cross $1-trillion milestone for first time
What's the story
Foreign institutional investors (FIIs) have surpassed a significant milestone in India, with their cumulative assets under custody (AUC) exceeding $1 trillion for the first time. This figure represents a substantial 26.7% increase since the start of 2024 and is the highest surge since December 2017. The equity AUC alone stands at an impressive $930 billion, while debt and other investments account for $76.83 billion of the total AUC.
Equity surge
FII ownership in Indian equities reaches 6-month high
FII ownership in Indian listed companies, also known as FII equity AUC, has reached a six-month high as a percentage of the total market capitalization of all firms listed on BSE. This surge is primarily due to record investments following the US Federal Reserve's dovish stance and rate cut. In September alone, FIIs invested nearly $7 billion in Indian equities, marking their highest monthly buying since December 2023.
Sector breakdown
Financial services sector attracts significant FII investments
The financial services sector has emerged as the top choice for FIIs in September, attracting over ₹27,200 crore. This is followed by healthcare and real estate sectors with ₹6,639 crore and ₹5,375 crore respectively. Other sectors that drew substantial interest from foreign investors include FMCG (₹4,900 crore), capital goods (₹4,000 crore), consumer durables (₹3,736 crore), telecommunications (₹1,935 crore), services (₹1,725 crore), chemicals (₹1,445 crore), power (₹1,409 crore) metals & mining (₹1,155 crore) and construction (₹1,095).
Share offloading
FIIs offload shares in certain sectors
Despite the overall positive trend, FIIs have offloaded shares in certain sectors. These include consumer services (₹2,940 crore), automobiles (₹2,106 crore), and information technology stocks (₹1,219 crore). Other sectors facing selling pressure included construction materials (₹901 crore) and oil & gas (₹640 crore).
Debt increase
FII investments in Indian debt rise significantly
FIIs have also shown a significant interest in Indian debt, investing $3.75 billion in September alone. This brings their total debt investments for 2024 to $17.09 billion. Overall, FIIs's investments across various categories including debt, equity, AIF, mutual funds and hybrid funds have reached about $30.66 billion in 2024 so far, surpassing last year's figure of $28.70 billion by a considerable margin.