Foreign investors' holdings fell by 16.60 percent to a ten-year low


MUMBAI: Foreign Institutional Investors (FPIs) have been witnessing heavy selling in Indian stocks since September this year. FII holdings in Indian stocks fell to a ten-year low of 16.60 percent due to offloading.

The figures show that foreign investors are selling financial sector stocks and increasing investment in companies in manufacturing and other sectors.

FPIs' aggregate holdings in Indian equities stood at Rs 54.50 trillion at the end of November 23, which was 16.60 per cent of the total market cap. This is the lowest percentage since 2012.

Their holdings have seen a decline due to the continued sell-off in September. Apart from this, this decrease is also being seen due to changes in their portfolios. Mid-caps and small-caps, where FPIs are heavily invested, have also underperformed. FPIs were hit by a sell-off in September as US bond yields rose. While India's equities market has performed well compared to other developed and emerging markets, the sell-off in FPIs has been a surprise, an analyst said.

Foreign investors are easing investment in large-caps while increasing in small-caps and mid-caps from the obtained data.

Factors like India's strong economic condition, good corporate performance, reduction in NPAs and inflation are expected to curb the outflows of FPIs and they are expected to become buyers again.

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