Mumbai: Foreign portfolio investors (FPIs) invested Rs 1,215 crore into the Indian debt market in the first week of April. FPIs invested Rs 22,419 crore in debt markets in February and Rs 19,836 crore in January.
The net investment by FPIs in the Indian debt market touched 6-year high in FY 2024. The total foreign portfolio investment in debt market in FY 2024 surged to $14.58 billion. FPIs invested Rs 10,568 crore rupees into the equity markets and Rs 57,073 crore into the debt markets, taking the total net investment into the Indian capital market to Rs 67.641 crore.
According to data released by National Securities Depository, more than 70% of the inflows have come in the last five months following JP Morgan Chase’s announcement in September to add Indian government bonds to its benchmark Global Bond Index Emerging Markets Index. Out of the total $14.58 billion FPI investments, $10.6 billion inflows came in the last five months of the previous fiscal.
In September 2023, JP Morgan Chase & Co announced that it would add Indian government bonds to its benchmark Global Bond Index Emerging Markets Index (GBI-EM). Last month, the Bloomberg Index Services said it will also include 34 Indian government bonds eligible for investment via the country’s fully accessible route (FAR) in its Emerging Market Local Currency Index from January 31 next year.
The domestic bond market is likely to see an additional inflow of as much as $30 billion after the inclusion of government securities in a major global index starts in June, according to Standard Chartered.
The yield on the benchmark 10-year G-sec closed at 7.06% on March 28 from 7.31% on March 31 last year, reflecting a fall of 25bps.
The debt market is a platform where debt securities are traded by investors. These securities are issued by companies and the government authorities to raise capital for business operations, infrastructure development, and other projects. The Indian debt market is regarded as one of the largest in Asia and serves as a viable alternative to traditional banking channels for financing purposes. It consists of two main categories – the government securities market (G-Sec) and the corporate bond market.
Foreign institutional investors (FII) or Foreign portfolio investors (FPI) are those who invest in the financial assets of a country while not being part of it. On the other hand, Domestic Institutional Investors (DII) are those who invest in the country they are living in. Both types of investors can impact the economy’s net investment flows.
Post Your Comments