FII inflows gallop to $30 billion so far this year

Betting big on the government's reforms agenda, net investments by overseas investors into India so far this year reached $30-billion level, while their cumulative total inflows into the country crossed $200-billion mark. The net investments by foreign investors into Indian debt markets since the beginning of 2014 have reached $17 billion (Rs 1.2 lakh crore) while the same for equities stand $13 billion (over Rs 78,000 crore), taking the total to $30 billion (Rs 1.8 lakh crore). This includes a net investment of $3.65 billion in this month.

Market analysts maintain that overseas investors (foreign Institutional Investors, sub-accounts or foreign portfolio investors) have been betting on the Indian market mainly on account of the reforms agenda of the new government at the Centre. Also, they anticipate that inflows would continue in the coming months on slew of measures announced by the government.

Foreign Institutional Investors, the main driver of the equity market, have helped pushed up the benchmark BSE Sensex by 26 per cent so far in 2014 and is now moving above 26,000 level.  The strong inflows in the recent months have taken the cumulative net investments of foreign Institutional Investors into India to $201 billion, while their investments in rupee terms is Rs 9.7 lakh crore.

This is based on the data since November 1992 when the foreign Institutional Investors began investing into Indian markets and includes about $159 billion investments into equities and further about $42 billion in debt markets.

From the start of June, foreign institutional investors along with sub-accounts and qualified foreign investors have been clubbed together by market regulator Sebi to create a new investor category called  foreign  portfolio investors.