Overseas investors have pumped in a staggering over Rs21,000 crore in Indian capital markets since the beginning of the month owing to easing inflation and rate cut by Reserve Bank of India (RBI).
Foreign Institutional Investors (FIIs) have bought shares worth Rs5,992 crore ($977 million) till January 23, while bought debt worth 15,336 crore ($2.5 billion) taking the total investment to Rs21,328 crore ($3.45 billion), latest data with Central Depository Services ltd (CDSl) showed.
These investors got re-christened as FPIs or Foreign Portfolio Investors last year under a new regulatory regime that promises to make it easier for them to invest in India.
Market analysts attributed the huge inflow to low inflation levels and rate cut by RBI. The central bank on January 14 surprised market participants with a 25 basis point rate cut. Besides, foreign investors are betting on Indian capital markets on expectations of more rate cuts by the apex bank.
In 2014, the net investment by overseas investors into the debt markets was Rs1.16 lakh crore, while in the equities it stood at Rs98,150 crore. Overall, net investment by foreign investors stood at Rs2.58 lakh crore in 2014.