FPI inflows at $3.5 bn in Jan on expectations of better earnings


New Delhi, Feb 4: Foreign investors have pumped in a whopping $3.5 billion (over Rs 220 billion) into the country’s capital markets in January in anticipation of better corporate earnings and attractive yields.
However, the pace of FPI flows may slow down in the short term due to the new tax introduced on equity investments, but from the long-term perspective, the scenario continues to look positive, Morningstar India Senior Analyst Manager (Research) Himanshu Srivastava said.
According to the depositories data, Foreign Portfolio Investors (FPIs) infused a net amount of Rs 137.81 billion (Rs 13,781 crore) in equities and Rs 84.73 billion (Rs 8,473 crore) in debt in January — translating into net inflows of Rs 222.54 billion (Rs 22,254 crore or $3.5 billion).
This comes following an outflow of over Rs 35 billion (Rs 3,500 crore) by FPIs from the capital markets (equity and debt) in December, depositories data showed.
“High inflows in January is a usual thing because of the purchase happening for building the new fiscal books.
The other reason was the anticipation of better earnings and a growth-biased 2018-19 Budget,” said Harsh Jain, co-founder and COO of online investment platform Groww.
Dinesh Rohira, CEO of 5nance, an online platform providing financial planning services, said fund infusion can be attributed to anticipation of earnings’ recovery and attractive yields.