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Hans India
11 hours ago
- Business
- Hans India
FPI inflows remain resilient, SEBI move to further boost foreign investments: Analysts
Mumbai: The trend of foreign portfolio investment (FPI) experienced a reversal in April and demonstrated considerable strengthening in May, characterised by positive inflows, which continues as June progresses, analysts said on Saturday. On June 20, the FPI inflows in equity stood at Rs 7,940.70 crore, as per the NSE's latest data. According to market experts, the inflows recorded in May represented the highest level observed in eight months, signifying a resurgence of interest from foreign investors in the Indian markets. 'Nonetheless, geopolitical tensions, including the conflict between Israel and Iran, alongside global uncertainties, fostered a cautiously optimistic pattern in June,' said Vipul Bhowar, Senior Director-Listed Investments, Waterfield Advisors. Enhancing domestic fundamentals and a favourable long-term growth outlook indicate that, should global conditions stabilise, India may experience more sustained and stable foreign portfolio investment inflows in the future, he added. India's economy continues to stand out as one of the world's fastest growing and most resilient, backed by strong macroeconomic fundamentals and a vibrant policy landscape. The nation's regulatory institutions, led by SEBI, have consistently pursued reforms aimed at deepening market participation, enhancing transparency, and simplifying compliance to attract global capital. In a landmark move to deepen the debt market and provide much needed liquidity; SEBI has announced regulatory relaxations exclusively for FPIs investing in Government Securities (G-Secs) in the recent board meeting. 'This forward-looking measure arrives on the heels of India's inclusion in global bond indices like the JP Morgan Global EM Bond Index and Bloomberg EM Local Currency Government Index, which is expected to attract large-scale FPI inflows,' said Manoj Purohit, Partner and Leader, Financial Services Tax, Tax and Regulatory Services, BDO India. SEBI's move reduces compliance burdens by harmonising KYC review timelines with RBI norms, exempting GS-FPIs from submitting investor group details, and permitting NRIs, OCIs, and Resident Indians to participate in GS-FPIs with fewer restrictions. Additionally, FPIs now enjoy a more relaxed timeline -- 30 days for disclosing material changes, up from 7 days earlier. These changes reflect SEBI's risk-based regulatory approach and are poised to deepen FPI engagement in India's sovereign debt market. As India's economic fundamentals remain robust, these progressive measures will strengthen the country's appeal as a stable and attractive investment destination for global institutional investors, said analysts.
Reuters
04-04-2025
- Business
- Reuters
Foreign investors fuel surge in Indian financials in March; outflows persist for fiscal 2025
April 4 (Reuters) - Foreign portfolio investors (FPIs) ramped up purchases of India's financial stocks in the second half of March, marking the highest fortnightly inflows into the sector in 15 months, data from the National Securities Depository showed on Friday. FPIs invested 175.85 billion rupees ($2.06 billion) in financials, accounting for two-thirds of the total $3.05 billion worth of inflows during the period. The benchmark Nifty 50 (.NSEI), opens new tab also snapped its longest losing streak in 29 years. Analysts attributed the buying in financials to attractive valuations, potential rate cuts, and a liquidity injection by the central bank. Additionally, a regulatory approval that doubled the investment threshold for FPIs to 500 billion rupees ($5.86 billion) prompted a sharp spike in inflows in the last week of March. "The decision is encouraging for the FPI community and will hopefully bring back much-needed volume in trades and liquidity in the market," said Manoj Purohit, partner and leader of financial services tax at BDO India. OUTFLOWS PERSIST However, despite the inflows in March, outflows from Indian stocks still came out on top for the fiscal year ended March 31. Net foreign outflows for the year were the second-highest on record, reaching $12.7 billion as FPIs who were net buyers in the first half of the fiscal, turned net sellers in the second half. They offloaded domestic shares worth $29 billion in the October-March period on the back of slowing earnings growth and elevated valuations relative to other emerging markets. By the end of fiscal 2025, the Nifty 50 had fallen about 10.5% from its late-September peak and its 12-month forward price-to-earnings ratio was trading at a 3% discount to its 10-year average of 20.6x. Banks and non-bank lenders were also trading well below their long-term averages. The late-March buying offered short-term relief to markets in March, but risks still remain, say analysts. "FPIs could reduce exposure to emerging markets as risk aversion rises," said Devarsh Vakil, head of prime research at HDFC Securities, citing global trade disruptions and U.S. reciprocal tax policies. ($1 = 85.2740 Indian rupees)
