High-Risk FPIs Hold Investments Worth Rs 2.6 Lakh Crore, Says SEBI
SEBI has proposed additional disclosures for FPIs and plans to categorise overseas investors under high, moderate and low risk.
The market regulator has categorised around Rs 2.6 lakh crore of assets under management as investments held by high-risk foreign portfolio investors.
The Securities and Exchange Board of India, in a discussion paper on a framework for mandating additional disclosures from FPIs, is looking to categorise overseas investors under high, moderate, and low risk categories. So far, they have been classified as category I and II based on profile and jurisdiction.
In the discussion paper, the regulator said that based on certain assumptions, at the end of March 2023, it estimates that FPI assets under management of around Rs 2.6 lakh crore (or over $31 billion) are likely to be identified as high-risk FPIs that meet either 50% group concentration or have assets of more than Rs 25,000 crore (nearly $3 billion).
This amount rose to around Rs 2.8 lakh crore at the end of April 2023.
To be sure, this forms just 6% of the total assets under management of foreign portfolio investors and will be less than 1% of India's total market capitalisation, which recently crossed $3.3 trillion.
FPI assets at the end of March stood at Rs 44.58 lakh crore, according to data available on the National Securities Depository Ltd.
The U.S., Singapore, Luxembourg, Mauritius, and the U.K. are among the top 10 jurisdictions from which India receives such overseas investments, accounting for over Rs 30.5 lakh crore of FPI flows. Jurisdictions beyond the top 10 accounted for Rs 7 lakh crore as of March.