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FII

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Foreign Institutional Investors

July, 2012

Introduction

Foreign institutional investors (FIIs) have displayed intense optimism in India's growth prospects as the country remained relatively insulated from the global economic meltdown; thanks to strong domestic consumption, focus on infrastructure development and robust banking system.

India is expected to attract better portfolios in 2012 as there is little risk to the long-term gross domestic product (GDP) growth in the country with little dependence on western world. Also, Indian stocks remain lucrative in terms of valuations.

According to UNCTAD's World Investment Report 2012, India is the third most favoured destination for investment after China and the US for major global companies. The report also projects that foreign investments in India could increase by more than 20 per cent in 2012-13.

Key Statistics

  • Total FII investment in 2012 (till July 13, 2012) stood at US$ 9.82 billion wherein US$ 1.3 billion were infused during the first two weeks of July itself, according to data released by capital market regulator, the Securities and Exchange Board of India (Sebi)
  • During July 3-13, 2012, FIIs were gross buyers of shares worth Rs 24,626 crore (US$ 4.47 billion), while they sold equities amounting to Rs 17,270 crore (US$ 3.14 billion), translating into a net investment of US$ 1.3 billion
  • The foreign fund houses also infused US$ 309 million in the debt market in July 2012 taking the overall net investments by FIIs into debt markets to US$ 4.32 billion in 2012 (till July)
  • As on July 13, the number of registered FIIs in the country stood at 1,754 while the total number of sub-accounts was 6,358
  • Another statement released by the Reserve Bank of India (RBI) has revealed that India's foreign currency assets (FCAs), the biggest component of the forex reserves, grew by US$ 1.17 billion to US$ 256.95 billion for the week ended June 29 2012 which further incremented foreign exchange reserves by US$ 1.36 billion to US$ 289.992 billion.
  • The value of gold reserves also increased by US$ 0.17 billion during the week under review at US$ 25.76 billion.