Foreign Portfolio Investors (FPI) increased from 10,608 to 11,081 in FY 23
Securities and Exchange Board of India’s (SEBI) annual report for the financial year 2022-23 revealed that over 400 new foreign portfolio investors (FPIs) joined the Indian markets in the last financial year. According to the data, the number of FPIs operating in India increased to 11,081 from 10,608 in FY 22.
While the number of FPIs increased by 4.5 per cent in the last financial year, the assets under custody (AUC) of these investors reduced by 4.4 per cent. As on March 31, 2023, the AUC stood at Rs 48.7 lakh crore, declining from Rs 50.94 lakh crore .
FPIs data has been in focus lately due to the bull run on India stock markets. In the first four months of financial year 2024, these investors were net buyers which has helped both benchmark indexes post good returns. The annual report of SEBI has noted several key numbers which show how these investors traded in the Indian equity and debt markets.
Trends In FPI Data
As per the markets regulator data, FPIs remained net sellers in the last financial year. These investors have been net sellers in the last four out of five financial years. SEBI said in its report, "FPI pull-out was driven by the series of rate hikes by the Federal Reserve and other central banks in the wake of mounting inflationary pressures. Continuation of Russia-Ukraine crisis had further deteriorated geopolitical environment and had led to foreign investors’ flight to safety."
Breaking down the data for equity and debt markets, the report noted that the investors turned net sellers in the debt segment after being buyers in FY22. While they remained net sellers in equity segment, their outflows significantly reduced in the last financial year. The outflows decreased to Rs 37,632 crore from Rs 1.4 lakh crore in FY 22.
The largest attraction in the equity segment for these investors was the financial services sector. Other sectors that caught attention of FPIs were information technology, oil and gas, fast moving consumer goods and automobile.
Country wise classification of the dataset showed that the most of the FPIs were from United States in the last financial year. However, the biggest increase in addition was seen from Ireland and Canada. While FPIs from these two countries increased in number, their AUC declined by 1.8 and 5.4 per cent.
Notably, the largest decline was seen in the assets managed by FPIs from Mauritius. While the number of investors increased, their AUC declined by 41.3 per cent in FY 2022-23. The AUC of investors from United States, Singapore and Norway increased by 3.1, 5.3 and 12.9 per cent respectively.