Domestic institutional investors (DIIs) were bigger buyers in the Indian stock markets over the last six months or so having invested close to Rs 22,000 crore.
Foreign portfolio investors (FPIs), on the other hand, bought Indian equities worth around $660 million (approximately Rs 4,400 crore). Much of the buying was done by mutual funds as they picked up stocks worth Rs 19,000 crore.
Market watchers believe that flows from DIIs will continue to remain positive for some time with the increasing popularity and convenient nature of systematic investment plans (SIPs) which have helped investors yield better than benchmark returns even in times of turbulent market conditions.
“Historically, investors have always played it safe as the majority of them have refrained from putting in their money directly into the markets. Lump sum investments in mutual funds or the SIP route seems to be a safer choice for investors during market turmoil for most domestic investors”, said Rikesh Parikh, vice president, Motilal Oswal Securities.
Every month, nearly Rs 3,000-3,500 crore flows into SIPs, according to industry sources. Flows into the equity segment of mutual funds since November 2015 stood positive for most of the months till date, except in March 2016, when the flows turned negative due to redemptions.
In FY15, DIIs were net sellers of Rs 20,128 crore worth of equities, while in FY16, domestic funds turned net buyers of Rs 79,909 crore worth of equities.
Andrew Holland, CEO, Ambit Capital, said: “With increased investor confidence post the Modi government, domestic institutions and also individuals increased their investments in mutual funds, either directly or through SIPs, due to which a lot of money started coming into the mutual fund space on a regular basis even during difficult market conditions.”
According to data from AMFI, investors have been increasingly using mutual funds as an investment option. Total folios for the mutual fund industry as on March 2016 stood at 4.76 crore, against 4.17 crore in March 2015.