Between August 2023 and August 2024, the period of last one year, FPIs have invested around Rs 64,824 crore in the Indian stock market.
According to data from depositories, while FPIs invested a total of Rs 1,82,965 crore in this period, net divestment stood at Rs 1,18,141 crore.
Till August 14, FPIs have pulled out Rs 18,824 crore from the country's equities. On the other hand, their investment in the debt market stood at Rs 8,624 crore during the same period.
A number of factors make the Indian market very attractive to foreign investors. The high growth rate, stable government, falling inflation, financial discipline, and continuous efforts to establish India as a capital market hub are, according to analysts, the driving factors behind the increased flow of foreign investment.
The growth rate was 8.2% for FY 2023-24. Projections, if anything, would further raise the growth rate to 7.2% in the current fiscal year.
Inflation in India has also been moderating, with the retail inflation rate falling to 3.54 per cent in July from 5.08 per cent in June.
According to experts, some of the factors for the spurt in FPI investments are the commitment of the present government to continue reforms and slowdown in the Chinese economy, as well as some recent block deals done by FPIs.
Noticeably, in the Indian equity market over the past year, a spectacular rally has taken place. The Bombay Stock Exchange appreciated 21% and that of National Stock Exchange by 25%.
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