Zania-Editor
In September, India saw its second highest inflows of foreign investment for 2024, following March. The Securities and Exchange Board of India (SEBI) announced the launch of a new Foreign Portfolio Investor (FPI) outreach cell within its Alternative Investment Fund and Foreign Portfolio Investors Department. This cell will focus on engaging directly with FPIs to help them access the Indian securities market more easily.
The outreach cell’s main tasks will include providing guidance to potential FPIs during the pre-application stage, assisting with necessary documentation and compliance, supporting them during the onboarding process, and resolving any issues that come up during registration or later.
Despite global geopolitical uncertainties, FPIs have remained optimistic about the Indian stock market. By September 17, they had invested a net total of $3,682 million in Indian equities, which is higher than the net monthly flows for six out of the previous eight months in 2024.
Key reasons that make emerging markets like India attractive include manageable fiscal deficits, the impact of rate cuts on the Indian currency, strong stock valuations, and the Reserve Bank of India’s efforts to control inflation without reducing rates. The significant buying by foreign institutional investors (FIIs) can be seen in the massive ₹14,064 crore invested in the cash market on September 20, spurred by the US Federal Reserve’s 50 basis point rate cut, which signals the start of a rate-cutting cycle.
Market experts believe that this trend of FII buying will continue in the coming days, especially as banking stocks become more appealing due to the reduction in the credit-deposit gap.
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