FPI | Business Upturn

SEBI retains rule mandating additional disclosures by FPIs holding over 50% equity AUM in a single corporate group

Markets Desk — Mon, 24 Mar 2025 12:00:55 +0000

In a key decision aimed at maintaining transparency and regulatory discipline in Indian markets, the Securities and Exchange Board of India (SEBI) has chosen to retain the requirement for foreign portfolio investors (FPIs) to disclose their ownership when more than 50% of their equity Assets Under Management (AUM) is concentrated in a single corporate group. The rule, first introduced as part of SEBI’s 2023 disclosure reforms, continues to form a critical part of the market watchdog’s efforts to safeguard against circumvention of key ownership norms.

At its 209th board meeting held in Mumbai, SEBI reiterated that FPIs with significant concentration in a single group must comply with enhanced disclosure obligations under the additional disclosure framework. These disclosures include granular details on ownership, economic interest, and control—right down to the level of the natural person.

This rule is specifically designed to ensure compliance with the Minimum Public Shareholding (MPS) norms and the Substantial Acquisition of Shares and Takeovers (SAST) regulations, both of which aim to protect market integrity and prevent indirect promoter control through opaque investment structures.

SEBI clarified in its press release that no changes are being made to the 50% group-level concentration threshold, and the existing framework will continue to apply. The regulator reaffirmed its commitment to prevent any structuring that could potentially bypass key regulatory guardrails—especially in cases where FPIs are used as vehicles for concentrated promoter interests.

This comes alongside SEBI’s approval to double the threshold for size-based FPI disclosures from ₹25,000 crore to ₹50,000 crore, recognizing the significant growth in equity market volumes over the past two years. However, by keeping the group-level concentration rule unchanged, SEBI signals that it remains vigilant against any attempt to mask control or exert undue influence through large FPI holdings

FPI ownership in NSE 500 falls to a 12-year low, DII ownership at record high

Markets Desk — Mon, 12 Aug 2024 08:11:21 +0000

A recent analysis by DAM Capital reveals a significant change in the ownership dynamics of Indian-listed companies. Domestic institutional investors (DIIs) now hold a record high of 16.9% of Nifty 500 companies, while foreign portfolio investor (FPI) ownership has declined to 18.8%, its lowest level in nearly 12 years.

This shift is driven by strong participation from retail investors through mutual funds. Since March 2021, FPI free float ownership has decreased each quarter, with domestic investors now controlling nearly 53% of the float.

DIIs have increased their stakes across large, mid, and small-cap segments, with the largest increase seen in largecaps (Nifty-50) at approximately 60 bps. Retail investors hold an ownership stake of 8.7%, with a total holding value of USD 392 billion.

The analysis also highlights sector trends, with FPIs and DIIs increasing their stakes in capital goods, consumer services, power, and real estate for four consecutive quarters. In contrast, both FPIs and DIIs have decreased their stakes in FMCG for four straight quarters.

This shift in ownership dynamics reflects the growing influence of domestic investors in the Indian market, with retail investors playing an increasingly significant role.

Pre- Market overview with Dalal street witnessing profit booking amid mixed global cues

Finance Desk — Wed, 24 Jan 2024 02:56:50 +0000

In a mixed start to the trading session, domestic equities initially opened on a positive note but soon experienced a significant sell-off driven by profit booking and varying global cues. The third-quarter earnings season is in full swing, contributing to stock-specific actions during this shortened trading week.

Pre-Market Overview:

GIFT Nifty Signals Positive Start:

GIFT Nifty (formerly SGX Nifty) traded higher by 87 points, indicating a positive start for Dalal Street at 21,277. India VIX, a gauge of market fear, rose by 7.6% to settle at 14.85 levels.

S&P 500 Records High Close:

The S&P 500 achieved a record high close on Tuesday amid a mix of early quarterly results. The index rose by 0.29%, Nasdaq gained 0.43%, and Dow experienced a 0.25% decline.

Mixed Asian Markets:

Asian stocks presented a mixed picture, with optimism in China and lower openings in Japanese markets. S&P 500 futures increased by 0.2%, Hang Seng futures rose by 2.1%, Japan’s Topix fell by 0.2%, Australia’s S&P/ASX 200 remained stable, Euro Stoxx 50 futures dropped by 0.3%, and Nasdaq 100 futures rose by 0.2%.

Dollar Strengthens:

The dollar hovered near a six-week high against major peers on Wednesday as investors cemented expectations that the Federal Reserve would be in no rush to cut interest rates in the face of a resilient U.S. economy.

FII/DII Activity:

Foreign portfolio investors divested equities amounting to Rs 3,115 crore on Tuesday, while domestic institutional investors infused Rs 214 crore.

Rupee Depreciation:

The Indian rupee depreciated by 8 paise to 83.15 against the US dollar, influenced by foreign fund outflows and subdued sentiments in the domestic equities market.

FPI pull over ₹6,400 crore from Indian equity markets

Aryan Jakhar — Sun, 08 May 2022 10:48:42 +0000

According to news agency PTI, foreign investors withdrew around 6,400 crore from the Indian equity market in the first four trading sessions of the current month. After the Reserve Bank of India (RBI) and the US Federal Reserve boosted interest rates.

According to Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities, FPI flows in India are projected to remain erratic in the short term. Due to headwinds such as high petroleum prices, inflation, and tight monetary policy, among others.

This comes at a time when Foreign Portfolio Investors (FPIs) have been net sellers for the past seven months. Removing a colossal amount of over Rs.1.65 lakh crore from the stock market. This was largely due to expectations of a US Federal Reserve rate hike. And the deteriorating geopolitical environment following Russia’s invasion of Ukraine.

Following a six-month selling run, FPIs became net investors in the first week of April when markets corrected, investing Rs 7,707 crore in stocks. They turned net sellers after a brief respite during the holiday-shortened April 11-13 week, and the sell-off persisted in subsequent weeks.

It is vital to note that FPI flows have been negative in May to far, with FPIs selling roughly 6,417 crore between May 2 and 6, according to depositories’ statistics. The market was closed on May 3 in observance of Eid.

FPIs pull with more interest

Vijay Singhania, Chairman, TradeSmart, said. “With central banks across the world pressing the panic button and increasing interest rates, equity markets have also reciprocated the sentiment. Foreign investors continue to sell relentlessly.”

Morningstar India’s Associate Director – Manager Research, Himanshu Srivastava, described the week as “eventful.” On May 4, the RBI raised the policy repo rate by 40 basis points with immediate effect and the cash reserve ratio by 50 basis points with immediate effect in an off-cycle monetary policy review. The markets reacted strongly to this, and they have been on a downward trend ever since.

The US Federal Reserve, on the other hand, boosted rates by 50 basis points on the same day, the largest increase in two decades. It stoked fears among investors that more significant rate hikes are on the way, he added.

The Bank of England also raised its main interest rate to its highest level since 2009. In addition, the market anticipates 10% inflation in the United Kingdom. Concerns over COVID-19 in China could also disrupt global supply networks and slow growth. According to Chouhan, this causes foreign investors to return to their own nation.

FPI withdrawl goes big

FPIs withdrew a net amount of 1,085 crore from the debt market during the period under review, in addition to stocks. Market volatility is likely to stay high in the future, since international investors may continue to withdraw cash. Selling is predicted to continue unless the battle is called off, according to TradeSmart’s Singhania.

According to Morningstar’s Srivastava, there is currently nothing that would encourage foreign investors to participate in Indian equities markets.

“Besides the rate hikes by both RBI and US Fed. Uncertainty surrounding Russia-Ukraine war, high domestic inflation numbers, volatile crude prices. And weak quarterly results does not paint an incredibly positive picture. The recent rate hikes could also slow the pace of economic growth, which is also a concern”. He said.

The recurrence of coronavirus outbreaks in China and other parts of the world is adding to the concern. FPIs often become risk adverse in such situations and take a wait-and-see approach until more clarity emerges, he noted.

Foreign flows into Indian shares may remain under pressure. Until the fundamental motivations and investment scenario alter, he noted. Given the current circumstances and rapidly changing global landscape.

Apart from India, other rising economies such as Taiwan, South Korea, and the Philippines have all experienced outflows in April.

FIIs pump in Rs 5,001 crore in Indian equities in August so far

Vandana Nampoothiri — Mon, 23 Aug 2021 06:51:33 +0000

Foreign Portfolio Investors (FPI) invested Rs. 5001 crores in Indian equities alone in August, PTI reported.

According to data from National Securities Depository Limited (NSDL), the net FPI investment in equities stands at Rs 54,037 crore in 2021. As reported by PTI, The FPIs have made a comeback after a net outflow of Rs 11,308 crore in July.

Between August 2 and 20, Rs. 2,244 crore have also been invested in the debt segment, PTI reported. In total, FPI invested Rs. 7,245 crore in the Indian capital market.

Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities said, “FPIs have been net buyers in Indian equities in Aug 2021 till date. FPI flows are expected to be volatile, given FOMC meeting minutes suggesting increased tapering likelihood.”

He also said that tapering is expected to have a substantial impact on global equity markets he said. As reported by PTI, Chouhan also noted that in other Asian markets like South Korea, Taiwan, and Thailand FPI continues to be negative to the tune of USD 5,269 million, USD 855 million, and USD 341 million, respectively.

On August 18, BSE Sensex hit a record high of 56,000 points for the first time in history while Nifty 50 hit a new record of 16,700.

FPIs invests in Indian equities worth Rs 2,085 crore in first half of August

Sneha Sengupta — Sun, 15 Aug 2021 09:56:24 +0000

Foreign portfolio investors (FPIs) brought around Indian equities worth Rs 2,085 crore during the first half of August catering to improvement in economic activity in the current fiscal year. According to the depositories data, overseas investors involved a net of Rs 2,085 crore between August 2-13.

During the same period, they managed to put forth a net ₹2,044 crore from the debt segment. The inflows in August can be accounted to development in economic activity in the domestic market periphery, however, concerns over the third mutant wave of COVID-19 spread globally, according to Shrikant Chouhan, executive vice president, equity technical research at the Kotak Securities.

“The small figure indicates lack of conviction on the part of FPIs, said VK Vijayakumar, the chief investment strategist at Geojit Financial Services. FPIs were sellers in financial services and IT in July,” he averred.

Since markets are at record highs with stretched valuations, some profit booking by FPIs can be expected, going forward, Vijayakumar added.

Pertaining to the growing market trends, Chouhan asserted that the latest wave in South Korea, Thailand and Taiwan continues to be negative to the note of USD 1,906 million, USD 362 million and USD 184 million, attached respectively.

FPI flows in India is expected to be volatile, given the concern pertaining to the pandemic third wave and Federal Reserve’s plans to eventually taper its asset purchases,’ Chouhan s. averred.

ICICI bank shares boom as FPI raise stakes in quarter end December

Sarthak Yadav — Wed, 20 Jan 2021 08:36:04 +0000

As foreign portfolio investors (FPI) shareholding increased in the quarter end December 2020, ICICI bank share price added over a percent intraday today.

In the December 2020 quarter end foreign portfolio investors (FPIs) shareholding increased to 47.43% from 45.66% in September 2020. Whereas, Mutual Funds (MFs) reduced its stake in the bank to 26.35% from 27.07%.

LIC lowered its stake to 8.4% from 8.87%.

On January 30, 2021 the board of directors of the company will hold a meeting to consider and approve the unaudited financial results for the quarter and nine months ending December 31, 2020.

As on 13:04 ICICI bank was quoting Rs. 550.80, up Rs 4.70 at BSE.

The share touched its 52-week high Rs 561 and 52-week low Rs 269 on 13 January, 2021 and 24 March, 2020, respectively.

Currently, it is trading 1.2% below its 52-week high and 106.04% above its 52-week low.

FII inflows in India continue to soar since October 2020

Divya Joyce — Mon, 21 Dec 2020 07:08:43 +0000

The gush of cheap foreign money into Indian stocks has hit Rs 1.98 lakh crore in the fiscal year through December 15, a level not seen in any fiscal year to date since FY93 and could continue amid record low-interest rates and easy liquidity in developed markets.

Foreign investors bought $2.81 billion of Indian equities between December 1 to 9 and India saw record high FII interest in November at over Rs 65,000 crore. The key reason for the same was an increase in India’s weightage by MSCI in their global Emerging Markets Index to 8.7 percent from 8.1 percent. This increase in weight could have resulted in a passive flow of over $2.5 billion. This year, they have bought around $18.92 billion.

The top 5 sectors which have accounted for a significant chunk of FII/FPI flows are banks (almost a fifth), household and personal products, capital goods, oil and gas and other financial services, including NBFCs, HFCs, AMCs (see chart). In dollar terms too, the investments are at a record level.

The fund’s binge by FIIs has led to Indian markets scaling new highs every passing day. While FIIs have been buying non-stop, domestic funds are selling off.

The index is but one reason for seeing a surge inflows. Other reasons could be an improvement in the economic scenario post-COVID-19 and the strong result season apart from High liquidity infusion by central banks, which could now be creeping in.

Because of index changes, while passive flows could have been around $2.5 billion, active flows could be around 6x of the same given that 87% of the money flow into India is from non-India dedicated active funds. The country has not seen this kind of money flowing in as yet.

Another major reason behind such a large inflow is the expected stimulus worth trillions of dollars from central banks to revive economies that are hit hard by the COVID-19 induced lockdown, said Hemang Jani, Head – Equity Strategy, Broking & Distribution, Motilal Oswal Financial Services Ltd.

Commentaries of banks suggest that there is an improvement in growth and asset quality. The asset quality outlook is much better than initially feared as collection efficiency picked up sharply in 2QFY21.

India has seen much higher consistency in FPI flows in comparison to other emerging markets. This should continue to be the case going forward because businesses in other emerging markets (barring China) cannot hope to attain the scale that businesses in India would attain. The ability of the country to absorb large flows is also there as are investible assets.

India is being viewed as a potential opportunity by investors with the economy having the capacity to grow tremendously. The march of globalization has slowed down on account of COVID-19, maybe even reversed. The border situation has helped increase awareness about improving domestic manufacturing capabilities. Buoyed by strong support from the Government, FII investment has been strong and is expected to improve going forward.

FPIs’ 70% of October inflow concentrates in banking and technology stocks

Akanksha Yadav — Mon, 16 Nov 2020 05:41:34 +0000

National Securities Depository Ltd. (NSDL) suggests that about 70 percent of the foreign portfolio investors (FPI) inflow into Indian equities have concentrated in the banking and technology sectors in the month of October. The portfolio investors have pushed an amount of Rs 16,945 crore into local stocks in October and out of this, nearly Rs 9,500 crore has been invested by them in banking stocks. FPIs’ purchase of private bank’s shares in the month of October is driven by above-the-average September quarter earnings, improved asset quality, and lower valuations because of the recent share underperformance.

Foreign portfolio investors have pumped Rs 3,327 crores into the technology sector and its shares in October as the companies are extremely-rich and their earnings have been consistent even when the backlashes due to COVID-19 severely hit other sectors.

Data suggests that the investors have also increased their share of stakes in automobiles, consumer discretions, capital goods, consumer durables and construction companies. These investors have withdrawn a sum of Rs 871 corers from oil & gas companies and a sum of Rs 847 crores from metals. They have pulled out a total of Rs 350 crores from the telecom and insurance sectors.

The picture attached displays the sectoral investments made by the investors in a descending manner.

FPIs invest Rs 35,109 crore in November in the Indian market

Divya Joyce — Sun, 15 Nov 2020 09:49:29 +0000

FPI (Foreign portfolio investors) have invested a massive Rs 35,109 crore into the Indian market, a net sum of Rs 29,436 crore into equities and Rs 5,673 crore into debt segment between Nov 2-13. The cooperate earnings and reform measures undertaken by govt to revive investment activities kept the investors attitude positive.
During the period review, a net amount of Rs 35,109 crore was pumped by overseas investors in the Indian market and a net sum of Rs 22,033 cr was invested in the preceding month.

Arjun Yash Mahajan, head-institutional business, Reliance Securities said, “Indian markets continue to outperform and have continued to offer FPIs better risk-reward propositions in terms of corporate earnings recovery and reform measures undertaken by the government to revive investment activities in the country. The weaker dollar index and absence of quality value play at reasonable valuations in FPIs, home markets have further given them a reason to move allocation to emerging markets like India.”

FPIs are expected to remain optimistic on Indian markets, market experts said. They are advised to bet on sectors which are resilient from the prolonged economic downturn, Mahajan added

“Agriculture in the form of auto exposure, pharma, IT, select private bank are attractive sectors to continue to keep on the radar,” Mahajan said.