FIIs pump in record Rs 1.4 lakh cr in equities

Foreign institutional investors have poured in a record Rs 1.4 lakh crore ($26 billion) in the Indian stock market in FY 2012-13, the highest ever since overseas entities started investing in the country.

Foreign Institutional Investors made a net investment of Rs 1,39,408 crore (Rs 1,394.08 billion) during the fiscal ended March 31, 2013, according to latest data available with the market regulator Sebi.

This was the highest net inflow by FIIs in a single fiscal year since their entry into Indian capital markets in 1992-93.

In 1992-93, overseas investors had made a net investment of only Rs 13 crore (Rs 130 million) into the share market.

Market experts believe the reforms initiatives undertaken by the government to boost economic growth and investor sentiment have led to a renewed interest among the foreign investors.

Besides, FIIs are increasingly betting big on emerging markets like India amid growing uncertainty in European countries.

"India has had an excellent fiscal year because of a slew of reform measures taken by the government from September onwards," CNI Research's CMD Kishor Ostwal said.

The huge FII inflows came despite the number of FIIs registered in India dipping to 1,757 this fiscal from 1,765 at the end of fiscal year ended March 31, 2012.

Interestingly, there have been only three instances where FIIs have invested more than Rs 1 lakh crore (Rs 1 trillion).

The overseas investors had infused Rs 1,10,221 crore (Rs 1,102.21 billion) and Rs 1,10,121 crore (Rs 1,101.21 billion) in 2009-10 and 2010-11,

respectively.

Moreover, FIIs were also seen pouring money in the debt market and infused Rs 28,334 crore (Rs 283.34 billion) during the previous fiscal in the segment.

The pace of foreign investments picked up in the past few months as the current calendar year has seen FIIs pumping in over Rs 55,000 crore ($10 billion) in a record time of three months.

Positive measures taken by the government also helped attract FIIs, which in turn helped the market benchmark Sensex soar by about eight per cent in the past fiscal.

However, in the fiscal 2011-12, the net investment by FIIs in stock market was the lowest in the last three years at Rs 47,935 crore (Rs 479.35 billion).

Since opening up of Indian markets for FIIs in 1992, they have made a cumulative net investment of Rs 6.3 lakh crore (Rs 6.3 trillion) in shares and Rs 1.68 lakh crore (Rs 1.68 trillion) in the debt segment.

As per Sebi data, the total number of registered FIIs were 1,765 at the end of March 31, 2013 from 1,757 at the end of the fiscal year 2011-12.

However, the number of FII sub-accounts has risen to 6,335, from 6,322 at the end of 2011-12.

The sub-accounts include foreign firms, individuals and institutions on whose behalf FIIs make those investments.

The rate of growth in their numbers has, however, grown at a slower pace in the past fiscal.