Foreign portfolio investors have cut their inflows in India to $3.7 billion in FY22 and with that they have also decreased their holding in NSE500 to 19.9 percent or worth $582 billion, down from their peak of 21.4 percent, reported PTI, quoting a brokerage report.
As per the report, the FPI outflows touched a record high of $14.6 billion during FY22, till early this week, of which March alone saw them taking out as much as $5.4 billion. Meanwhile, February saw another record pullout to the tune of $4.7 billion, it added.
Further, the report noted that the value of FPI holdings stood at $582 billion as of March 15, 2022, down from $667 billion from the September 2021 peak. Among sectors, IT (15 percent, up 87 bps), energy (15.5 percent, up 44 bps), healthcare (4.9 percent, up 22 bps) saw higher allocation, it added.
On the other hand, allocation to financials was down 107 bps to 31.5 percent, discretionary down by 49 bps to 9.1 percent, informed the report.
While the FPI ownership of domestic stocks peaked in December 2020 at 21.4 percent, which inched down to 21.2 percent in March 2021, by December 2021 it came down further to 19.9 percent, according to the report.
According to the report, the market is not bleeding badly because domestic institutional investors have been very active and have pumped in $13.1 billion in the year of which $5 billion were in February alone, leaving the net outflow from the market only at $1.5 billion.
The $5.4 billion of FPI outflows in March were the sixth consecutive month of outflows taking the cumulative pullout to $14.6 billion on the back of heightened geopolitical risks. And the March outflows were the most severe since March 2020 after the pandemic hit the world.
Since late March after Russia invaded Ukraine, the market has been jittery. The outflows gathers further momentum with the US Fed hiking rates by 25 bps and stuck its six more rounds of rate hike this year.