The number of FPI’s with the regulator’s approval increased to 8,826 at the end of September 2017, from 7,807 at March-end, resulting in an addition of 1,019, as per the Sebi’s latest data released. Also, foreign investors have pumped in more than Rs 95,500 crore into the Indian capital markets - equity and debt - during the period under review. However, in September 2017 the FPIs were net sellers in the Indian securities market to the tune of Rs 10,043 crore.
Net outflow stood at Rs 11,392 crore from equity, whereas Rs 1,349 crore inflow into debt. There was a net pullout of Rs 24,000 crore from stock markets in the past two months (August and September). Says Arvind Chari, Head Fixed Income and Alternatives, Quantum Adviors: “Indian equities remains to be extremely overvalued as seen from a global emerging market perspective and hence witnessing outflows.” In the month of October, FPI turned net buyers and infused a net sum of Rs. 3,055 in equities, backed by the government's recapitilisation plan with an amount of Rs 2.11 lakh crore.
The board of Securities and Exchange Board of India (Sebi) in June decided to ease the entry norms for overseas investors by permitting direct access to FPIs from eligible jurisdictions. Also, the regulator raised FPIs' investment limit for government debt, permitted them to invest in unlisted corporate debt as well as securities. Having said that, India remains to be an attractive destination for global investors. FPI is investment by non-residents in Indian securities including stocks, government bonds, corporate bonds, convertible securities, and infrastructure securities.