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Investments by FIIs in the Indian stock market have crossed Rs 1 lakh crore so far this year, while inflows are expected to improve further after state assembly election results have brightened the chances of a BJP-led government at the Centre.
Foreign Institutional Investors (FIIs), major participants in the Indian stock market, were gross buyers of shares worth Rs 7,46,334 crore and sellers of equities worth Rs 6,45,757 crore till December 6. This translates into a net inflow of Rs 1,00,577 crore (USD 18 billion), according to Sebi data.
Since FIIs entry into the country's capital markets in 1992-93, net inflows have exceeded Rs 1 lakh crore only in 2010 and 2012. The overseas investors had net invested Rs 1,28,360 crore in 2012, while in 2010, they made a record net inflow of Rs 1,33,266 crore.
According to market analysts, fund inflow by FIIs will further improve in the coming months as a major victory for Bharatiya Janata Party (BJP) in assembly elections has improved the chances of the party coming to power at the Centre next year.
Some experts also believe that the assembly results have further strengthened BJP prime ministerial candidate Narendra Modi's position.
Results were declared today for assembly elections in Delhi, Rajasthan, Madhya Pradesh and Chhattisgarh.
Overseas investors started the year on a positive note and continued their positive bias till May. However, the pace of investment slowed down later.
Interestingly, of the total net inflow, close to Rs 37,000 crore came in the last three months, following the measures taken by the Reserve Bank of India (RBI) to boost the weakening rupee and revive economic growth.
However, overseas investors have pulled out a net Rs 55,075 crore from the debt market so far this year.