Despite the ongoing volatility, India's appeal as a long term investment destination seems to remain intact as the private equity capital flows to the country touched a record $27.6 billion in the first six months of 2022.
As per a report by the Economic Times (ET), "private equity capital flows to India reached a record $27.6 billion in the first six months of the year, nearly offsetting the $29 billion outflow in portfolio investments. Private equity capital flows, via the foreign direct investment (FDI) route, are considered far more stable than money coming in as portfolio investments."
ET quotes data compiled by Indian Venture Capital Association (IVCA) which says investments by big-ticket private equity investors and venture capitalists rose 15.5% year on year.
As many as 713 deals were signed between January and June compared with 526 in the corresponding period last year, the report further added.
Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI) are key instruments to fund a part of economic growth.
FDI indicates the investment of foreign investors to own a controlling stake in companies of other countries, whereas, the FPI implies an investment of foreign investors in financial instruments such as stocks, bonds and mutual funds, etc.
Meanwhile, FPIs turned net buyers so far this month with an investment of nearly ₹1,100 crore in the Indian equity market, PTI reported.
This comes following a net withdrawal of ₹50,145 crore from equities in June. This was the highest net outflow since March 2020, when they had pulled out ₹61,973 crore from equities, data with depositories showed.
There has been an exodus of Foreign portfolio investors (FPIs) from Indian equity markets over the last nine months, since October 2021.
