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Foreign Institutional Investors

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Foreign Institutional Investors

January, 2014

FII overview

Foreign institutional investors (FIIs) bought shares worth Rs 4,157 crore (US$ 675.27 million) and sold equities worth Rs 3,148 crore (US$ 511.70 million) within the first three days of January, 2014, according to data from Securities and Exchange Board of India (SEBI). This resulted in a net inflow of Rs 1,009 crore (US$ 164.01 million). Also, foreign investors invested about Rs 3,71,342 crore (US$ 60.34 billion) in Indian stocks in the four years ended December 2013. These figures attest to the influence of foreign investment in India's growth as an economic power.

The country's emergence as an economic force is, however, a recent development. Of the many reasons for its growth, foreign investment is among the primary factors. When the government took the step to allow 100 per cent foreign direct investment (FDI) in various sectors, it could not possibly have envisaged the boom that followed. Empowered by the State's initiatives and the relaxing of foreign investment rules, sectors such as automobiles, construction, real estate, and retail, among others, have gone from strength to strength.

FII – Key Statistics

  • Overseas investors invested over Rs 1,000 crore (US$ 162.47 million) in the Indian equity market in the first few days of January 2014.
  • In the same period, FIIs' total investment in debt and equity was about Rs 2,754 crore (US$ 447.46 million).
  • As of January 3, 2013, the number of registered FIIs in India was 1,738.
  • FIIs invested more than Rs 12,100 crore (US$ 1.96 billion) in the country's equity market during October 2013.
  • The number of registered FIIs in India was 1,757 in FY 2012–13 while the number of FII sub-accounts reached 6,335 from 6,322 at the end of 2011–12.

FII – Key Investments and Developments

Department of Industrial Policy and Promotion (DIPP) has approved Tesco's proposal to invest in Tata-owned Trent Hypermarket. This would be the first foreign investment proposal in multi-brand retail to be cleared by the Foreign Investment Promotion Board (FIPB). UK-based Tesco will fund US $90 million of the total US$ 110 million investment, to subscribe to equity shares of Tent Hypermarket Ltd while US $20 million will be used to acquire existing equity from Trent. Both Trent and Tesco will hold 50 per cent each in the venture following the induction of foreign equity.

US-based private equity major The Carlyle Group has made a strategic minority investment in Indian healthcare provider Global Health Private Ltd. The investment was made by Anant Investments, an affiliate of Carlyle Asia Partners III. Global Health runs a 900-bed hospital in the National Capital Region (NCR) of Delhi. The hospital provides super-specialty care in cardiology, gastro, liver transplant, neurology, and orthopedics.

NYSE-listed credit ratings agency, Moody's Corp has acquired Amba Investment Services – a provider of investment research and quantitative analytics for global financial institutions. The deal is believed to be around US$ 80 million–85 million. Amba will operate as part of Copal Partners, Moody's Analytics subsidiary, stated the company. "Together, (Amba and Copal's) scale, talent and resources offer global financial institutions a broader array of research and analytics," said Mr Mark Almeida, president, Moody's Analytics.

FIIs continue to invest in Indian equity markets, with their net inflow touching the Rs 100,000 crore (US$ 16.24 billion) mark in December, 2013. According to official data, the inflows reached a staggering Rs 1,01,441 crore (US$ 16.48 billion) on December 6, 2013. Following their entry into the Indian capital markets in 1992–93, net FIIs inflows have gone past Rs 1,00,000 (US$ 16.24 billion) crore in 2010 and 2012. In 2012, FIIs investments were Rs 1,28,360 crore (US$ 20.85 billion).