FPIs’ India Equity Exposure Becomes Miniscule in February

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FPIs’ India Equity Exposure Becomes Miniscule in February
Yagnesh Kansara - 02 March 2020

Mumbai: There is no dearth of bad news. The continuous inflows from the Foreign Portfolio Investors (FPIs) in the Indian equities, which was the only solace or the good news that was in favour of the stock market, that too is now on the verge of going against the market. FPIs have been buying aggressively in the Indian Equities since September last, have begun to offload profusely. The pressure is so much that their net investment in equities has remained just Rs 1,820 crore, while in debt segment it was Rs 4,734 crore for the month of February.

Dealers are of the opinion, as they (FPIs) adopted a cautious stance amidst corona virus scare, subdued domestic economic data and disappointing corporate earnings their net investment (equity and debt both) in February slipped down to only Rs 6,554 crore in Indian markets.
According to the depositories data, FPIs pumped in a net amount of Rs 1,820 crore into equities and Rs 4,734 crore into the debt segment between February 3 to February 28.
FPIs were net investors in Indian markets to the tune of Rs 23,102 crore in till February 21. As per the data provided by the Depositories, FPIs invested a net sum of Rs 10,750 crore into equities and Rs 12,352 crore into the debt segment, taking the total net investment to Rs 23,102 crore, between February 3 and 20. FPIs have been net buyers in the Indian markets since September 2019, the data also showed.
Like other global markets, the Indian markets too came in the line of fire by the coronavirus scare. FPIs have been wary of investing in markets which rely on tourism as the spread of virus can adversely impact their prospects and economic growth.
"From this perspective, Indian equity market is better positioned among such group of countries and hence it has been attracting foreign flows”, a senior analyst, at a research firm said.
Market participants, however, believe that headwinds to foreign investment flows are expected to continue over the coming weeks. FPIs have adopted a cautious stance on the back of lack of growth in the domestic economy, disappointing corporate earnings and social unrest that the country is facing, he added.
The 30-share S&P Sensex logged its second-biggest one-day fall in history on February 28 on coronavirus concerns.

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