The equity assets under management (AUM) of foreign portfolio investors (FPIs) dropped to an 18-month low of $531 billion during the first fortnight of June, data from NSDL show, reported Economic Times.
Their AUM dropped by 22% from a record high of $686 billion at the beginning of 2022, steeper than the 13% fall in the country’s market capitalisation.
FPIs have sold about ₹50,000 crore ($6. 4 billion) of Indian equities as of June 29, the highest monthly outflow since March 2020. This is the second instance after March 2020 when the FPI outflow was this high.
Also, June is the ninth consecutive month for FPIs to pull out funds from Indian shores. The cumulative FPI outflow over the past nine months was ₹2. 6 lakh crore while the domestic mutual funds deployed around ₹2. 1 lakh crore.
The share of domestic mutual funds in the total equity AUM rose to 87% in May 2022 from 74% a year ago.
Gross selling by the FPIs reached around ₹2 lakh crore in June 2022 making it to be the seventh month in the past 16 to register selling of that magnitude.
As a result, their gross buy-to sell ratio dropped to 0. 75 in June compared with the long-term average of 1. 07. The gross buy to sell ratio had touched a low of 0. 73 in March 2020.