I’ve recently compiled data on FII (Foreign Institutional Investors) investments in the Indian equity market from 2002 to 2023 and thought it would be enlightening to share some insights and spark a discussion on the topic.
- Consistent Growth Periods:
- From 2002 to 2007, investments consistently rose, with a notable peak in 2007, more than doubling the previous year’s investment.
- Post the 2008 dip, we saw a sharp rebound in 2009, with 2010 marking an unprecedented surge.
- Dips and Outflows:
- 2008 stands out with a significant net outflow of -41216 crores, correlating with the global financial crisis.
- Other years like 2016, 2018, and notably 2022 also recorded net outflows, indicating significant shifts in market dynamics or global conditions.
- Recovery Phases:
- The resilience of the Indian market is evident with sharp recoveries post outflows, as seen in 2009 after the global crisis and in 2023 following the 2022 decline.
- Overall Trend: Despite periods of outflows, the overall trend from 2002 to 2023 remains positive, showing the Indian equity market’s attractiveness for foreign investments. However, the considerable variability in investments post-2010 suggests evolving global economic conditions influencing FII decisions.
- External Factors & Correlations: These investment patterns undoubtedly correlate with global and domestic events. The 2008 dip can be tied to the global financial meltdown, while other fluctuations might resonate with domestic policy changes, political stability, and overall economic performance.
I’d love to hear your thoughts on these observations, especially if you can correlate these trends with significant events or policies during these years. How do you see these FII patterns influencing future market behavior, and what could this mean for individual investors?
Looking forward to a fruitful discussion!
Here is the raw data, that I compiled from NSDL website
(Everything in crores)
2019 : 135995