Foreign investors happy with Modi government's decision, record investment in 2019.

Foreign investors happy with Modi government's decision, record investment in 2019.

Institutional investors in the Indian stock market have made a record investment in the year 2019. In an analysis by ET Investors Guide, Domestic Institutional Investors (DII) and Foreign Institutional Investors (FII) invested a total of Rs 1.43 lakh crore in 2019. This is the highest in the last 15 years. It is believed that the decisions taken by the Modi government have been welcomed by the investors. The surcharge on the FPI in the budget was withdrawn in August by Nirmala Sitharaman, whose impact is clearly visible.

FPI share two-thirds

Foreign Portfolio Investors (FPI) invested about two-thirds of this amount. The rest of the money was invested by local funds. Institutional investors have invested an average of Rs 75076 crore annually in the Indian stock market in the last 15 years. In 2019, institutional investors invested nearly twice the money on this average.

$ 162 billion investment so far in 15 years

FPI and DII were net buyers in six of the last 15 years, meaning that their total investment was more than their total sales. Institutional Investors has invested around $ 162 billion in the Indian stock market in the last 15 years in total. The investment ratio of foreign institutional investors and domestic institutional investors during this period was 2.55.

Investment of domestic investors increased

Institutional investors held nearly a third of the total equity of BSE 500 companies at the end of September 2019. Institutional investment accounted for about one percent of the total capitalization of the Indian stock market in 2019. This has been around the average of the last five years, during which investment by domestic investors increased. The increase in this investment was due to increased investment through the Systematic Investment Plan.

DII share 14.40 per cent in September quarter

The share of Domestic Institutional Investors in BSE 500 companies reached record high with 14.4 percent in the September quarter. The difference in the percentage of trading volume of domestic mutual funds and foreign portfolio investors decreased significantly as local money rose. In 2019, the trading volume of domestic mutual funds stood at about half of the trading volume of foreign institutional investors.

 3.12 Lakh Crore Asset Management of SIP in November

Asset under management of SIPs for local mutual funds stood at Rs 3.12 lakh crore in November 2019 as against Rs 2.66 lakh crore in March 2019. This figure is from the Association of Mutual Funds of India (AMFI).

Lasting stock figures rising

With the increase in SIP book, it is known that the number of long-term amounts in Indian stocks is increasing. Similarly in 2019, the share of long term foreign funds increased in the AUM of foreign portfolio investors. The percentage of long-lived foreign funds rose to 21.41% in November 2019. Thus, it has registered an increase of 333 basis points in the last two years.

 Market strength will increase in the long term

Increasing share of long-term institutional investors can boost the strength of the Indian market and reduce selling pressure in the currency volatility and risk aversion.

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