FPIs pump ₹38,098 crore in Indian equities, debt inflows at ₹13,223 crore; Will the trend continue in FY25?

livemint.com:

₹38,098 crore worth of Indian equities and the total inflow stands at ₹51,542 crore as of March 22, taking into account debt, hybrid, debt-VRR, and equities, according to National Securities Depository Ltd (NSDL) data. The total debt inflows stand at ₹13,223 crore so far this month. "An interesting feature of the foreign portfolio investment in India this fiscal is the steady growth in debt investment in sharp contrast to the volatile equity investment.

This rising trend in debt investment is evident in March, too, with inflows of ₹13,223 crore in debt through 22nd March,'' said Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services. The fundamental reason for the sustained FPI flows into debt is the inclusion of Indian bonds in the JP Morgan EM Bond Fund and Bloomberg Bond Index which is expected to bring investment of around $25 billion.

This investment will begin only by June 2024 and, hence, FPIs are doing some front running in view of this potential investment, according to market experts. ‘’FPI inflows into debt is likely to continue, going forward. However, a sharp surge in debt flows is unlikely since the US bond yields have also risen in recent days and if the differential between developed market bond yields, particularly US bonds, and Indian bond yields decline, the debt inflows will moderate,'' said Dr.

V K Vijayakumar. FPIs outflow initially declined in February until they were net buyers by the end of the month, despite high US bond yields. The inflow into Indian equities stood at ₹1,539 crore and the debt market investment rose to ₹22,419 crore in February on top of the ₹19,836 crore bought in January.