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FII

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Foreign Institutional Investors

July, 2010

Foreign institutional investors (FIIs) poured inflows heavily to bet on the India growth story.

As per data released by the Securities and Exchange board of India (SEBI), FIIs invested US$ 2055.74 million in equities between July 1 and July 21, 2010, and US$ 1566.98 million in debt between the same period.

During January to June 2010, FIIs invested US$ 6878.50 million in equity and US$ 6083.90 million in debt.

Data sourced from SEBI shows that the number of registered FIIs stood at 1713 and number of registered sub-accounts rose to 5,426 as of June 30, 2010.

Moreover, India accounted for more than one-fifth of the US$ 22.1 billion private equity (PE) investments received by the emerging markets across the globe in 2009, according to a report by Emerging Markets Private Equity Association (EMPEA). In 2009, emerging markets accounted for about 26 per cent of global PE investment. In addition, the report added that global PE investment in emerging markets totalled US$ 22.1 billion with a total of 674 deals in 2009. Furthermore, Asia captured 63 per cent of total emerging market PE investments in terms of value in 2009, with India capturing US$ 4 billion, according to the report.

According to advisory firm Grant Thornton, 439 corporate merger & acquisitions (M&As) and PE transactions have been announced during January-May 2010 compared to 179 during the same period in 2009. The total deal value during January-May 2010 topped the US$ 30 billion mark, as compared to US$ 8.1 billion recorded in January-May 2009.

May 2010 alone witnessed 59 deals worth US$ 8.33 billion against 35 deals valued at US$ 1.85 billion in 2009. Out of this, 44 were M&As and the remaining 15 were PE transactions. Some of the key sectors that attracted significant investor interest in the M&A space were pharma and healthcare, banking and finance, mining, fast moving consumer goods (FMCG) and information technology (IT)/ information technology enabled services (ITeS), while PE firms struck deals in cement, education and real estate sectors, among others.

Investment Scenario

According to 'India PE Report 2010', released by global consultancy Bain & Company, PE and venture capital (VC) investments are projected to reach US$ 17 billion (around Rs 80,000 crore) in 2010.

The report includes a survey conducted across over 75 leading PE investors globally. The survey revealed that the number of respondents planning to invest in the range of US$ 200-500 million in the next two years has risen four-fold to 27 per cent in 2010.