Overseas investors have poured in a whopping over Rs 20,000 crore in the Indian capital markets since the beginning of September as influenced by the reform agenda of the new government.
Net investments by foreign investors in the equity market were Rs 5,117 crore ($848 million) from September 1 to 26, while they infused a net amount of Rs 15,308 crore ($2.5 billion) in the debt market during the period, taking the total to Rs 20,425 crore ($3.4 billion), as per the latest official data.
Market analysts maintain that overseas investors (Foreign Institutional Investors, sub accounts or foreign portfolio investors) have been betting on the Indian market mainly on account of the reforms agenda of the new government at the Centre.
They anticipate that inflows would continue in the coming months on a slew of measures announced by the government, including opening up the retail sector to foreign players, deregulation of diesel prices and a gas pricing formula and speedy auctions for de-allocated coal mines among others.
Since the beginning of the year, foreign investors have made a net investment of over Rs 2 lakh crore ($33 billion) into the country's securities market. This includes a net investment of over Rs 83,000 crore in equities and Rs 1.2 lakh crore into debt market.
Strong inflows in the recent months have taken the cumulative net investments of FIIs into India to $204 billion, or Rs 9.92 lakh crore, in nearly 22 year period.
This is based on the data since November 1992 when the FIIs began investing into Indian markets and includes about $160 billion investments into equities and about $44 billion in debt markets.
From June, FIIs along with sub-accounts and qualified foreign investors have been clubbed together by market regulator Sebi to create a new investor category called Foreign Portfolio Investors.