Foreign investors pulled out $12 billion from India between April-June
What's the story
The repatriation of earnings by foreign entities, including portfolio investors and private equity firms, has witnessed a sharp rise in the April-June quarter. According to data from the Reserve Bank of India (RBI), these outflows amounted to $12.2 billion during the period. The figure is more than double the same period five years ago, reflecting the strong performance of Indian financial assets.
Overall increase
Total investment income outflows also witness substantial rise
The RBI data also showed a sharp rise in total investment income outflows for foreign entities. The outflows nearly doubled to about $21.6 billion in the April-June quarter, from $11 billion in the same quarter five years ago. The category includes dividend income, profits, and reinvested earnings by overseas portfolio investors, private equity firms, and companies operating locally.
PE performance
Private equity exits reflect robust earnings
While the RBI data doesn't mention the source of dividends and profits, it is believed that a large part comes from private equity exits. These exits, including dividend income and profits, are captured in the investment income. Capital gains from higher valuations are accounted for in capital outflows, not income outflows.
Record high
Private equity exits reach 6-year high in 2024
According to a report by US-based consultancy Bain & Co., private equity exits in the first half of 2024 have hit a six-year high. This shows a strong performance and robust earnings from these investments, further highlighting the health of Indian financial assets. The data indicates that foreign entities are reaping substantial benefits from their investments in India's financial market.