Inflows from overseas investors hit a record high as they pumped in over Rs.2.7 lakh crore into the Indian capital markets last fiscal, which ended on March 31, 2015.
Foreign Institutional Investors made a net equity investment of Rs. 1.09 lakh crore in 2014-15, and a further Rs. 1.64 lakh crore into debt markets — Rs. 2.73 lakh crore in all, as per the latest data available with Central Depository Services Ltd (CDSL).
This was the highest net inflow by FIIs since being allowed to invest in Indian capital markets (equity and debt) over two decades ago in November 1992. The previous high was in 2012-13, when the net investments climbed to Rs. 1.68 lakh crore.
These investors got re-christened as FPIs or Foreign Portfolio Investors in the current fiscal under a new regulatory regime that promises to make it easier for them to invest in India. They have emerged as the key drivers of the market rally here and are likely to remain so.
FIIs had made a net infusion of nearly Rs. 80,000 crore into equity markets during 2013-14, while a record high amount of Rs. 1.4 lakh crore was pumped in the preceding financial year.
This is the fourth time in history that net FII inflows for a year have crossed the Rs. 1 lakh crore mark and analysts are optimistic about the current fiscal year as well. However, they had pulled out about Rs.28,000 crore from the debt markets in 2013-14.
According to market analysts, foreign investors remained bullish on the Indian equities and debt markets throughout the fiscal year 2014-15, mainly on account of several reform measures taken by the Central Government.
Experts believe that the inflows will remain equally strong or become even better in the current fiscal in view of Parliament clearing Bills related to insurance, coal allocation and mining as well as assurances in the Budget to revisit controversial tax areas like General Anti-Avoidance Rule.