Breaking Milestone: FPIs’ Soaring Confidence as Indian Securities Holdings Exceed $1 Trillion!

Foreign portfolio investors (FPIs) have reached a historic milestone by accumulating over $1 trillion in Indian securities, highlighting India’s increasing appeal to global investors. As of September 2024, FPIs hold $1.1 trillion in assets under custody, with $930 billion invested in equities and the rest divided between debt and hybrid instruments, according to the National Securities Depository Limited. This marks a threefold increase from the $329 billion during the Covid-19 low in March 2020. Throughout the same period, India’s market capitalization soared fourfold to Rs 474 trillion ($5.6 trillion).

India’s markets have offered strong long-term returns, second only to the United States, with the Sensex delivering a 10-year annualized return of 8.5% in US dollar terms, compared to the Dow Jones’s 9.7%. The achievement of the $1 trillion mark is credited to liberalized investment rules and a conducive regulatory environment.

Currently, FPI equity holdings constitute 16.4% of India’s total market capitalization, down from 20.1% in December 2020, due to significant inflows from domestic mutual funds and retail investors. India opened to FPIs in 1992, following the 1991 balance of payments crisis. Since NSDL began recording data in 2012, FPI assets have grown from $243 billion to surpassing $350 billion in 2014 and the $500 billion mark in 2017. The US, Singapore, and Luxembourg act as major sources of FPI flows into India.

Original Story https://www.business-standard.com/markets/news/fpis-holdings-in-indian-securities-surpass-1-trillion-for-the-first-time-124100700735_1.html
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