FPIs flood equity markets, infuse Rs 1.5 L cr in 2023 despite global uncertainty

NEW DELHI: In a dazzling resurgence, foreign investors have graced the Indian equity markets with an influx of nearly Rs 1.5 lakh crore in 2023, fuelled by optimism over the country’s resilient economic fundamentals amid shadows of a gloomy global scenario.

Experts believe that the positive trend may continue in 2024.

This follows Indian equities witnessing the worst-ever net outflow of Rs 1.21 lakh crore by FPIs in 2022 on aggressive rate hikes by the central banks globally after net inflows for three consecutive years.

Going forward, as the general elections approach next year, political stability and economic growth will become focal points for foreign investors. Besides, global cues on the inflation and interest rate scenario would dictate the flow of foreign money into Indian equities, said Himanshu Srivastava, associate director–manager research, Morningstar Investment Research India.

India, with its promising position for economic growth, is expected to continue attracting foreign investment flows, he added.

As of now, the foreign portfolio investors (FPIs) have made a net investment of around Rs 1.5 lakh crore in the Indian equity markets and around Rs 60,000 crore in the debt market. Collectively, they pumped over Rs 2 lakh crore into the capital market, according to data available from the depositories.

FPIs made a net infusion of Rs 25,752 crore in equities in 2021, Rs 1.7 lakh crore in 2020, which was the best year, and Rs 1.01 lakh crore in 2019.

In the year 2022, the flows from foreign investors were largely driven by factors like inflation and interest rate scenarios in developed markets, such as the US and UK, he said.