Equity assets under management of foreign portfolio investors reached a record $651 billion (₹48 lakh crore) at the end of August 2021, data from NSDL showed. It expanded by $255 billion (₹18 lakh crore) from the year ago period amid a rally in the domestic equity market and a sustained inflow over the past 12 months. FPIs accounted for nearly one-fifth of India’s market capitalisation of over $3.5 trillion in August.
Stocks from the banking and finance sector accounted for the largest share (31.8%) in the FPI portfolio followed by IT and energy (14.6% and 10% respectively). The weight of the IT stocks rose by nearly190 basis points (bps), the highest among all sectors, followed by metal stocks with an increase of 100 bps and 80 bps rise in the weight of consumer durables stocks.
With 53% return over the past 12 months, India has been the top performing market among major economies in the world. In addition, FPIs have invested close to $25 billion (₹1.8 lakh crore) during the period, which is one of the highest among the emerging markets.
The AUM of the FPIs doubled in sectors including metals, consumer durables, construction materials and utilities. Their AUM in the metals sector for instance grew by 190% to $15 billion, one the highest among all sectors. Allocation to the defence stocks rose to a 10-month high of 34% in August.