Investment in equity slowed down with the rise in bank deposit rates
- Slower pace of domestic institutional investors in equities investment in current year
MUMBAI: The pace of domestic institutional investors (DIIs) investment in Indian equities in 2023 is seen to be slower than last year. In the current year, DII has seen inflows of Rs 1 lakh crore in equities in 158 sessions, whereas last year, DII had invested more than Rs 1 lakh crore in 59 sessions only.
In 2022, DII invested a total of Rs 2.76 lakh crore in cash in the country's equity market, the highest ever in any calendar year.
The investment figure for 2021 was Rs 1 lakh crore while in 2020 DII's net sales were Rs 41000 crore.
An analyst said DII's investment in equities is increasing due to increase in SIP inflows. Usually when foreign investor inflows are strong, DIIs tend to sell off and book profits.
In the current year, DIIs are buying a net worth of Rs 103,125 crore in Indian equities while FIIs have bought net worth of Rs 8,361.50 crore.
Compared to other emerging markets, India's economy is currently in a strong position, as a result of which institutional investors are seeing attraction in the market.
However, higher deposit rates in banks are also believed to be responsible for the slower pace of DII's equity investments compared to last year. Bank deposit rates are currently seen at around seven and a half to eight percent. Due to increase in interest rate, bank deposits are increasing.
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