Overseas investors have pumped in a massive over Rs 11,300 crore in Indian debt markets since the beginning of the month.
Besides, Foreign Institutional Investors (FIIs) have made a net investment of Rs 244 crore in the stock markets.
These investors got re-christened as FPIs or Foreign Portfolio Investors last year under a new regulatory regime that promises to make it easier for them to invest in India.
Foreign investors were gross buyers of debt securities worth Rs 20,559 crore between January 1 and 16, while they sold bonds amounting to Rs 9,250 crore — a net inflow of Rs 11,309 crore (USD 1.8 billion) for the period, latest data with Central Depository Services Ltd (CDSL) showed.
Market analysts attributed the huge inflow in debt markets to inflation cooling off and expectations of an interest rate cut. The RBI on January 14 surprised market participants with a 25 basis point rate cut.
Analysts believe that the rate cut by RBI will further give a boost to inflows in debt markets.
In 2014, the net investment by overseas investors into the debt markets was Rs 1.16 lakh crore, while in the equities it stood at Rs 98,150 crore. Overall, net investment by foreigners stood at Rs 2.58 lakh crore in 2014.