Millennium Post

Stock markets got record $26-bn net FII inflows in just ended fiscal

Foreign Institutional Investors have poured in a record Rs 1.4 lakh crore ($26 billion) in the Indian stock market in FY 2012-13, the highest ever since overseas entities started investing in the country.

Foreign institutional investors (FIIs) made a net investment of Rs 1,39,408 crore during the fiscal ended 31 March 2013, according to latest data available with the market regulator Sebi.

This was the highest net inflow by FIIs in a single fiscal year since their entry into Indian capital markets in 1992-93.

In 1992-93, overseas investors had made a net investment of only Rs 13 crore into the share market.

Market experts believe the reforms initiatives undertaken by the government to boost economic growth and investor sentiment have led to a renewed interest among the foreign investors. Besides, finstitutional investors are increasingly betting big on emerging markets like India amid growing uncertainty in European countries.

'India has had an excellent fiscal year because of a slew of reform measures taken by the government from September onwards,' CNI Research's CMD Kishor Ostwal said.

The huge FII inflows came despite the number of FIIs registered in India dipping to 1,757 this fiscal from 1,765 at the end of fiscal year ended March 31, 2012.

Interestingly, there have been only three instances where FIIs have invested more than Rs 1 lakh crore. The overseas investors had infused Rs 1,10,221 crore and Rs 1,10,121 crore in 2009-10 and 2010-11, respectively.

Moreover, FIIs were also seen pouring money in the debt market and infused Rs 28,334 crore during the previous fiscal in the segment.

The pace of foreign investments picked up in the past few months as the current calendar year has seen FIIs pumping in over Rs 55,000 crore ($10 billion) in a record time of three months.

Positive measures taken by the government also helped attract FIIs, which in turn helped the market benchmark Sensex soar by about eight per cent in the past fiscal.However, in the fiscal 2011-12, the net investment by FIIs in stock market was the lowest in the last three years at Rs 47,935 crore.Since opening up of Indian markets for FIIs in 1992, they have made a cumulative net investment of Rs 6.3 lakh crore in shares and Rs 1.68 lakh crore in the debt segment.

According to Sebi data, the total number of registered foreign institutional investors were 1,765 at the end of March 31, 2013, up from 1,757 at the end of the fiscal year 2011-12. However, the number of FII sub-accounts has risen to 6,335, from 6,322 at the end of 2011-12. The sub-accounts include foreign firms, individuals and institutions on whose behalf FIIs make those investments. The rate of growth in their numbers has, however, grown at a slower pace in the past fiscal.


Indian companies mopped-up over Rs 6,000 crore during fiscal 2012-13 through initial public offerings (IPOs), a marginal rise of four per cent from the past year. A total of 10 companies collectively managed to garner Rs 6,059 crore through their IPOs during the fiscal year ended 31 March 2013, shows an analysis of data available with the stock exchanges.

This marks a slight increase of four per cent from the total funds raised through IPOs during the previous fiscal, 2011-12, when 33 companies had together mopped-up Rs 5,808 crore.

In 2010-11, a total of Rs 33,183 crore worth capital was raised by 52 firms through their IPOs. Most of the IPOs that hit the capital market in the fiscal were smaller in size (less than Rs 1,000 crore) and some companies even withdrew their offers after poor response. Besides, many companies did not launch their offers after doing all the groundwork and obtaining the necessary approvals.

Bharti Infratel, the tower arm of telecom giant Bharti Airtel, came out with the largest public issue of the year when it hit the capital market to raise Rs 4,118 crore.

This was also the biggest IPO since October 2010, when state-run Coal India had garnered Rs 15,475 crore.

Interestingly, there were three jewellery firms — PC Jewellers, Tribhovandas Bhimji Zaveri and Tara Jewels — that entered the capital market this fiscal.

Three firms — retailer Sai Silk, packaging firm Plastene India Ltd and component supplier to automotive industry Samvardhana Motherson Finance Ltd -- withdrew their offers, collectively worth Rs 1,832 crore, due to poor response. Among the major IPOs of the year, PC Jewellers raked in Rs 609 crore and rating agency CARE garnered Rs 504 crore

Housing finance company Repco Home Finance was the sole state-owned firm to enter the capital market through IPO route during 2012-13. Repco Home Finance raised about Rs 270 crore through its public offer.Other IPOs included Tribhovandas Bhimji Zaveri Ltd (Rs 200 crore), Tara Jewels (Rs 170 crore), VKS Projects (Rs 55 crore), MT Educare (Rs 35 crore), Speciality Restaurants Ltd (Rs 26.41 crore) and V-Mart Retail (Rs 26.25 crore).

Most of these companies plan to use the proceeds for expansion work and other general corporate purposes. Notably, fewer companies have entered the capital market compared to past year.
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