FPI Total Holding Hits Record $592.5 Bn

Investments by Foreign Portfolio Investors (FPI) in equities and debt reached its highest since 2014-15 this fiscal year. After pumping in $33.8 billion, the net outstanding investment for FPIs stands at $592.5 billion, of which $537.4 billion were in equities and $51.38 billion in debt.

Ten sectors account for 78 per cent of the total assets under the FPI custody. These include financial services, which has the maximum holding of $191.3 billion, software $76.1 billion, oil and gas $50 billion, automobiles and auto components $26.9 billion, pharmaceuticals and biotechnology $22.8 billion, sovereign debt funds $21.7 billion, household and personal products $20.2 billion, capital goods $19.8 billion, food, beverages and tobacco $15.7 billion and insurance $13.4 billion.

After hitting an all-time high of $45.7 billion in 2014-15, net FPI investments have been fluctuating between positive and negative territories. The year 2015-16 witnessed a net pullout to the tune of $2.5 billion. Another major pullout of $5.5 billion took place in 2019-20, according to the data collated by Care Ratings.

Of the close to $34 billion inflows this fiscal so far, as much as $8.4 billion came in December alone, the report says.

Investors from the US account for 34 per cent of the total assets under custody, followed by Mauritius (11 per cent), Singapore (8.8 per cent), Luxembourg (8.6 per cent), Britain (5.3 per cent), Ireland (4 per cent), Canada (3.4 per cent), Japan (2.8 per cent), and the Netherlands and Norway with a share of 2.4 per cent each.

When it comes to a strong correlation between FPI flows and movements in the stock indices, it can be noted that a $1-billion inflow for three months can increase the Sensex by 1.6 per cent.