Foreign investors turn net buyers, pour ₹20,200cr into equities
What's the story
Foreign Portfolio Investors (FPIs) have turned net buyers of Indian equities in July, reversing their previous selling trend. The total investment during the month stood at ₹20,199 crore. Out of this amount, ₹6,731 crore was invested through stock exchanges while the remaining ₹13,467 crore came via the "primary market and others" route.
Information
Debt inflows surge as well
Along with equity investments, debt inflows have also seen a major spike. According to data from the National Securities Depository Limited (NSDL), ₹29,211 crore was invested through the "General Limit" category alone. This indicates a growing interest in Indian debt instruments among foreign investors.
Strategic shift
Expert attributes shift to Asian market volatility
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, has attributed the change in FPIs' behavior to market volatility in South Korea and Taiwan.
He said, "The excessive volatility in markets like South Korea and Taiwan and the concentration risk in the 'chip trade' are prompting the FPIs to look for stabler markets like India."
Investment trend
Mid and small-cap focus
Vijayakumar also noted that a stable rupee and reasonable valuations in India's large-cap segment are contributing to the renewed inflows.
He said FPIs are now increasing their allocation toward Indian mid-cap and small-cap stocks, mainly due to the higher growth potential these segments offer over large-caps.
This trend indicates a strategic shift in foreign investment preferences within the Indian market.