Even though domestic institutional and retail investors pumped heavy money into equities in 2023, foreign investors – the big bulls of Dalal Street – stole the show with their biggest-ever bet on the emerging market.
Foreign portfolio investors net bought Indian equities, which includes both primary and secondary markets, worth Rs 1.77 lakh crore in 2023, according to StockEdge. This was the highest-ever inflow from FPIs in history, in rupee terms.
While in rupee terms, it was at a record high, in dollar terms, inflows were the second highest at $21.23 billion in 2023 after 2020.
Almost one-third of the inflows came in alone in December, which was also the highest inflows in a month witnessed in 2023.
In December, FPIs bought shares worth more than Rs 58,498 crore, the highest purchase by them in a month since November 2020. In November 2020, they had bought shares worth Rs 70,896 crore.
May, June, July, and December were the best months for Dalal Street from a flow perspective, as FPIs have pumped in more than Rs 30,000 crore in all of these months.
The robust inflows from FPIs as well as domestic investors helped benchmarks Nifty 50 and Sensex register 20% gains in 2023 and also be among the top 10 best performing markets in the world.
Strong corporate earnings, robust domestic macroeconomic tailwinds, supportive monetary policy, and increased government investment were the factors that made India one of the most sought-after emerging markets in the world for foreign investors.
Not only the secondary market, but the primary market too, was booming with as many as 57 initial public offers (IPOs), who raised Rs 49,434 crore from the market last year.
As far as FPI inflows are concerned, then most money managers are optimistic about the trend continuing in 2024, and even surpassing 2023 level.
“In 2024, it is likely that FII inflows could be as high as $40-50 billion, overwhelming DII inflows,” said ultra-bullish Vikas Gupta, the CEO and chief investment strategist at OmniScience Capital.
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