FIIs Invest $13.7 Billion in India
Foreign Institutional Investors have invested $13.7 billion in the Indian stock market as of November 2023.
- FIIs invest $13.7 billion in Indian stock market
- DIIs net buying reaches $129.21 billion
- FIIs register with SEBI to invest in India
- DIIs influence Indian stock market with 27.5% exposure to financial services
- Indian equity markets see growing influence of DIIs
Foreign Institutional Investors have invested $13.7 billion in the Indian stock market as of November 2023.
Meanwhile, Domestic Institutional Investors have increased their influence with $11,40,000 crore net buying over 25 months.
Officials said the investment trends show a shift in the Indian stock market.
Sources confirmed the growing power of DIIs in Indian equity markets.
Role of FIIs in Indian Stock Market
FIIs, or Foreign Institutional Investors, are investment entities or funds registered outside India that invest in Indian financial markets.
According to HDFC Mutual Fund, examples of FIIs include overseas mutual funds, hedge funds, pension funds, sovereign wealth funds, and insurance companies.
Government sources said FIIs have been key participants in the Indian markets, with their moves often weighing heavily on the direction of the markets.
Experts said the FII flows witnessed a tepid trend from 2000 to 2003, which coincided with the Dotcom bubble.
Growing Influence of DIIs
Domestic Institutional Investors have raised exposure to financial services to 27.5% while trimming exposure to information technology.
Witnesses said the growing influence of DIIs is strengthening India's markets in three ways.
Meanwhile, FIIs continue to favour globally aligned sectors such as energy and chemicals.
Sources confirmed the increasing market power of DIIs and their role as steady stabilisers, compared to FIIs' short-term volatility.
Historical Context of FII and DII
Historically, FIIs have been key participants in the Indian markets.
However, in recent years, DIIs have increased their influence.
Officials said the investment trends show a shift in the Indian stock market.
In contrast, the Bull Run from 2004 to 2007 saw FIIs pour in $46.4 billion into the Indian markets.
Despite this, the growing power of DIIs is expected to continue, with sources confirming their increasing market power.
Human Impact of FII and DII Investment
The investment trends of FIIs and DIIs have a significant impact on the Indian stock market.
Meanwhile, the growing influence of DIIs is expected to bring stability to the market.
Experts said the increasing exposure of DIIs to financial services will have a positive impact on the Indian economy.
However, the short-term volatility of FIIs may still affect the market.
In contrast, the long-term investment of DIIs is expected to bring growth to the Indian stock market.
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