FPIs Net Sell Over Rs 2 Lakh Crore Since September

Overseas investors remained net sellers of Indian equities for eight straight months as market volatility spiked amid the ongoing geopolitical crisis and inflation pressures.

The foreign portfolio investors have withdrawn more than Rs 2 lakh crore from the Indian equity market since September-end, according to data collated from National Securities Depository Ltd. website. In the current calendar year so far, they have withdrawn Rs 1.62 lakh crore.

FPI selloff, however, has been offset by nearly $23-billion (about Rs 1.78 lakh crore) buying by domestic institutional investors.

Foreign investors turned skittish after the U.S. Fed indicated tightening of rates in the last quarter of 2021. The uncertainties around the Russia-Ukraine crisis and a surge in inflation amid rising commodity prices and supply-chain constraints caused flight of money to fixed income assets.

Foreign investors have been net sellers in four fiscals over the last 21 years.

They were net sellers in equities to the tune of Rs 1.4 lakh crore in FY22, and have pulled out Rs 52,110 crore since April 2022.

In comparison, retail investors were net buyers in the equity cash market to the tune of Rs 1.65 lakh crore in FY22, and Rs 21,900 crore in April 2022, according to the NSE data.

Data for May is yet to be released.

The domestic institutional investor buying was supported by resilient inflows into mutual funds, which have bought Rs 2.21 lakh crore in FY22. DIIs have averaged Rs 18,471 crore a month in the last financial year. In the first four months of 2022, they have so far invested Rs 1.15 lakh crore.

Retail investors have net bought Rs 71,600 crore in the first four months of this calendar year, averaging nearly Rs 18,000 crore a month.