Pension funds, among the largest long-term sources of foreign portfolio inflows, scaled back their India bets in 2022, reported market daily Business Standard.
The value of their holdings has fallen by 13.3 percent or ₹57,242 crore, from ₹4.3 lakh crore at the end of 2021 to ₹3.7 lakh crore when December closed in 2022, showed the report.
Overall equity investment by foreign portfolio investors (FPIs) in India dropped 0.5 percent from ₹48.6 lakh crore to ₹48.3 lakh crore in the same period, added BS. The benchmark S&P BSE Sensex gained 4.4 percent.
A large part of the outflows happened in the first half of 2022, according to Rajnish Girdhar, chief executive officer, Mumbai-based Karma Capital.
“A significant amount of money came back into India from July onwards till about the last two weeks of December, when we again saw outflows; and then we saw outflows in January,” he said.
India’s weighting went up as people turned negative on China in the second half of the year, and that has now reversed, Girdhar added. But the outlook for flows over the medium term remains positive, he noted.
As per the report, pension funds and sovereign wealth funds saw their share in FPI assets fall to 14.1 percent by December 2022 compared to 14.9 percent in December 2021, driven largely by the fall in pension fund assets.