The year 2019 saw foreign portfolio investors (FPIs) betting big on Indian equities with total inflows breaching the ₹1 lakh-crore mark only for the fourth time ever and the first since 2013.
According to data from the National Securities Depository Ltd. (NSDL), FPIs have been net buyers at a little over ₹1 lakh crore in the current calendar year, the highest since 2013 when they net bought Indian shares worth ₹1.13 lakh crore.
Incidentally, FPIs have been net buyers at more than ₹1 lakh crore in a calendar year only on four occasions – 2019, 2013, 2012 and 2010 – with the highest single-year flows registered in 2010 at ₹1.33 lakh crore.
Highest monthly flow
Further, the year also saw FPIs pumping in almost ₹34,000 crore in March, which was the highest-ever single-month flows registered ever. Since September, FPIs have been net buyers in every single month with the cumulative flows until December pegged at about ₹51,500 crore.
Not surprisingly, the year also saw the benchmark indices breaching record levels on various occasions with the 30-share Sensex touching a high of 41,810 on December 20. FPIs are often considered to be the prime drivers of any bull run in the Indian stock markets.
A recent note by Edelweiss Securities highlighted that FPI ownership in BFSI — banking, financial services and insurance — along with the oil and gas sector, saw a significant increase during the year even as sectors such as IT, FMCG, pharmaceuticals and automobiles saw a drop in foreign holdings.
“BFSI saw FPI ownership increasing by 186 basis points (bps) last month and by (approximately) 263 bps over last 12 months. Similarly FPI ownership in insurance was up by 9 bps over the previous month and 168 bps over the last 12 months,” stated the report, adding oil and gas exposure of FPIs increased by 197 basis points over the last 12 months primarily due to buying in sector heavyweight Reliance Industries, along with the oil marketing firms.
On the other hand, the automobile sector saw a 147 bps fall in FPI ownership during the year that saw the overall exposure of overseas investors drop by $4.6 billion. Even the IT sector saw a 135 bps fall in the FPI ownership in the last 12 months.