FPI Inflows Since Pandemic Has Been Positive

Since the pandemic set in, the investment by Foreign Portfolio Investors (FPIs) have been generally positive to Indian stock markets and until the second week of May 14th have invested a net sum of $ 34 bn, CARE Ratings has said in a report.

The inflows have been presented in different periods below which also throws light on the pattern across months.

"The first two months of the lockdown in FY21 were not good in terms of FPI inflows in the equity market. In April there were net outflows of around $ 1bn with May then registering an inflow to take the position to $ 703 mn. The next four months were the time when the country went for an unlock process in different tranches. This was a bounce back time for the markets and FPI flows were around $ 9 bn. In this period there were positive flows in all months except September, which was also the time when the caseload was peaking. Since then, there has been positive net flows to the equity market," CARE Ratings has said in a report.

But the new financial year has not been good from the point of view of FPI flows, the rating agency has noted. "India is definitely the lowest performing country in terms of controlling the virus. The highest caseload does not inspire confidence with investors. There have been outflows of nearly $ 2.5 bn in the first 6 weeks of the year. Control of the virus through calibrated lockdowns as well as more effective policy action on treating patients would be required along with a successful vaccination plan to bring back confidence of investors," CARE has said in the report.