With overseas investors pumping in over USD 3 billion in the Indian capital markets this month, total foreign inflows have touched USD 13 billion since the beginning of the year.
Analysts expect the inflows to accelerate further in view of Parliament clearing bills related to insurance, coal allocation and mining as well as assurances in the Budget to revisit controversial issues like General Anti-Avoidance Rule.
Foreign Portfolio Investors (FPIs) have bought shares worth Rs 11,813 crore (USD 1.9 billion) from March 2-27. In the debt segment, the net inflows were Rs 8,912 crore (USD 1.43 billion), taking the total to Rs 20,725 crore (USD 3.33 billion), as per the data compiled by Central Depository Services Ltd.
The inflows have taken the foreign investment level in the country’s capital markets (equity and debt segments) to Rs 79,000 crore (about USD 12.75 billion) so far this year.
Market participants attributed the robust inflows to positive investor sentiment driven by the government’s announcement of several reform measures.
Besides, Finance Minister Arun Jaitley announced a slew of measures to attract overseas investment in the country in the recent Union Budget.
In 2014, the net inflows by overseas investors in debt markets was Rs 1.59 lakh crore, while the figure for equities stood at Rs 97,054 crore. Overall net investment by foreign investors stood at Rs 2.56 lakh crore last year.
To soothe investors’ nerves, Jaitley had deferred the controversial GAAR by two years, saying that its immediate applicability can create ‘panic’ in markets.