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In February, FPIs Infuse More Than Rs 15,000 Crore Into the Debt Market

<p>Due to the inclusion of Indian government bonds in the JP Morgan Index and the country’s generally healthy economy, Foreign Portfolio Investors (FPIs) have maintained their optimistic position on the nation’s debt markets, contributing a net injection of over Rs 15,000 crore so far this month. This is the largest monthly inflow in over six years, coming after a net investment of Rs 19,836 crore in January. Since June 2017, when they invested Rs 25,685 crore, this was the largest influx.</p>
<p><img decoding=”async” class=”alignnone wp-image-396589″ src=”https://www.theindiaprint.com/wp-content/uploads/2024/02/theindiaprint.com-in-february-fpis-infuse-more-than-rs-15000-crore-into-the-debt-market-image-1200×9-1.jpg” alt=”theindiaprint.com in february fpis infuse more than rs 15000 crore into the debt market image 1200×9 1″ width=”1280″ height=”853″ title=”In February, FPIs Infuse More Than Rs 15,000 Crore Into the Debt Market 3″ srcset=”https://www.theindiaprint.com/wp-content/uploads/2024/02/theindiaprint.com-in-february-fpis-infuse-more-than-rs-15000-crore-into-the-debt-market-image-1200×9-1.jpg 510w, https://www.theindiaprint.com/wp-content/uploads/2024/02/theindiaprint.com-in-february-fpis-infuse-more-than-rs-15000-crore-into-the-debt-market-image-1200×9-1-150×100.jpg 150w” sizes=”(max-width: 1280px) 100vw, 1280px” /></p>
<p>However, throughout the review period, foreign investors withdrew more than Rs 3,000 crore from equity. Prior to this, data from the depositories revealed that they had taken out a whopping Rs 25,743 crore in January. According to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, “the high valuation in the Indian equity market and the rising bond yields in the US are the main trigger for this divergent trend in equity and debt.”</p>
<p>The withdrawal from stocks, according to Himanshu Srivastava, Associate Director – Manager Research, Morningstar Investment Research India, is due to the unpredictability of the interest rate environment on a national and international level. The report indicates that till February 9, FPIs invested a net amount of Rs 15,093 crore in the debt markets this month.</p>
<p>As a result, in 2024, FPI investments totaled more than Rs 34,930 crore. For the last several months, they have been pouring money into the debt markets.</p>
<p>In December, FPIs invested Rs 18,302 crore, in November, Rs 14,860 crore, and in October, Rs 6,381 crore. Following the announcement of the inclusion of Indian government bonds in the JP Morgan Index, the trend of foreign direct investment (FDI) flow in the Indian debt markets was reversed last year. Together with the rather steady economy, this was one of the main factors contributing to the strong FPI flows, according to Srivastava.</p>
<p>In September of last year, JP Morgan Chase & Co. said that starting in June of 2024, it would include Indian government bonds into its benchmark emerging market index. It is expected that India would gain from this historic inclusion, which will bring in between USD 20 and $40 billion over the next 18 to 24 months.</p>
<p>According to him, this influx is anticipated to improve the availability of Indian bonds for overseas investors and maybe strengthen the rupee, which would boost the country’s economy. FPI flows in 2023 were Rs 68,663 crore in the debt markets and Rs 1.71 lakh crore in the equity market.</p>
<p>They contributed a total of Rs 2.4 lakh crore to the capital market. The inflow into Indian stocks occurred after the worst net outflow, amounting to Rs 1.21 lakh crore, in 2022 as a result of the global central banks’ aggressive rate rises. FPIs had made investments in the previous three years prior to the outflow.</p>

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