FPI inflows crosses Rs 20k cr in Sept, a 11-month high

The Dollar Business Bureau

Foreign portfolio investors (FPIs) invested more than Rs.20,000 crore into the Indian capital market in the month of September, a 11-month high.

This also marks the positive inflows (equity and debt), consecutively for last three months.

This trend is expected to remain in the coming weeks as the market regulator, Securities and Exchange Board of India (SEBI), has decided to provide direct entry to the overseas investors who are well-regulated, in investing in the corporate bonds, according to experts.

The recent jump in capital inflow is attributed to the factors like progress in GST rollout, improved corporate earnings and the decision of US Federal Reserve for not lifting interest rates.

The environment has improved after the current account deficit (CAD) lessened sharply to $300 million, or only 0.1 percent of GDP, in the quarter ended in June and sales of domestic passenger vehicles grew for the consecutive 14 month in August.

As per the depositors' data, in September, FPIs’ net investment stood at Rs.10,443 crore in equities whereas it was Rs.9,789 crore for debt, making the overall inflow to Rs.20,233 crore ($3 billion).

This net inflow in the capital markets was the highest since October last year when the FPIs had invested Rs.22,350 crore.

The recent inflow has taken the tally of FPI investment Rs.51,293 crore in equities in the current year whereas the investment for debt stands at Rs.2,441 crore, which makes net inflow of Rs.53,734 crore.