Decoding The Foreign Institutional Investor [ FII’s ] Activities
- Categories Finance
- Date July 8, 2023
WHO ARE FII/FPI?
Foreign Institutional Investor (FII) or Foreign Portfolio Investor (FPI) refers to an entity or organization that invests in the financial markets of a country different from its own. These investors are typically large financial institutions such as:
- Pension Funds
- Mutual Funds
- Asset Management Companies
- Endowment Funds
- Sovereign Wealth Funds
- Insurance Companies
- Hedge Funds, and other similar entities.
In general, they represent foreign investors participating in the financial markets of a particular country.
THEN WHY IT'S IN THE NEWS?
Foreign Institutional Investors have continuously purchased stocks in the Indian markets for a consecutive period of 15 days. They have invested more than Rs 22,700 Crores in this time period.
(Figures in Rupees in Crores)
Let’s try to get into the brains of these investors and find out the reason of infusion of capital into the Indian markets.
- India has emerged as a prominent leader despite recent disruptions such as the Russia-Ukraine war, recessionary fears, inflationary pressures, and banking crises.
- India has achieved robust economic growth, positioning itself as the fastest-growing economy globally.
- India is transitioning from a developing country to a developed one.
- The financial and banking system in India demonstrates a strong foundation and stability.
- Direct currency transactions are now being conducted with multiple countries.
- The collection of Goods and Services Tax (GST) has consistently increased over time.
- The government has implemented various initiatives such as the Production-Linked Incentive (PLI) and PLI 2.0 schemes, Atmanirbhar Bharat, and expanded budgetary allocations across multiple sectors.
- India is experiencing an all-time peak in power demand.
- Renewable energy generation has experienced a substantial surge.
- Sectors such as Automobile, FMCG (Fast-Moving Consumer Goods), Telecommunications, Financial Services, and Infrastructure have received significant boosts.
- Major corporations like Amazon, Apple, Alphabet and Meta have made significant investments and established numerous manufacturing plants in India.
- India benefits from a youthful population, providing a continuous source of talent and innovation.
- It is the most populous country globally, with a large and diverse population, suggesting immense growth potential for companies.
In the face of adversities, India has not only persevered but thrived, showcasing its resilience, innovation, and unwavering spirit. As we witness the nation’s remarkable growth story unfold, let us acknowledge and celebrate the achievements that have propelled India to new heights. Together, let us grab the opportunities that lie ahead and stay invested in the markets.
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– HET RAICHURA