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Foreign Portfolio Investors (FPIs) invested Rs 64,824 crore in the Indian share market over the last 12 months (August 2023 to August 2024). According to depository data, the total investment by FPIs was Rs 1,82,965 crore, with a total sell-off amounting to Rs 1,18,141 crore last year.
Up to August 14, FPIs withdrew Rs 18,824 crore from equities, while their total investment in the debt market during this period was Rs 8,624 crore.
Experts attribute the increased foreign investment in the Indian market to several factors, including a high growth rate, a stable government, reduced inflation, financial discipline by the government, and efforts to position India as a capital market hub. India’s GDP growth rate was 8.2 per cent in FY 2023-24, and it is expected to grow at 7.2 per cent in the current financial year. The inflation rate has also been on a continuous decline, with retail inflation at 3.54 per cent in July, down from 5.08 per cent in June.
Other experts cite additional reasons for the rise in FPI investment, such as the government’s commitment to ongoing reforms, the economic slowdown in China (evidenced by a 12 per cent decline in copper prices over the past month), and block deals made by FPIs.
The Indian stock market has experienced a remarkable rally over the past year. During this period, the Bombay Stock Exchange (BSE) benchmark index surged by 21 per cent, while the National Stock Exchange (NSE) soared by 25 per cent.
