Indian equity markets witnessed a strong net inflow of foreign portfolio investments of ₹2.74 lakh crore during the concluded fiscal, a finance ministry statement said.
The robust inflows were a result of a faster-than-expected economic recovery and reflected the confidence of foreign investors in the fundamentals of the Indian economy, the statement said, quoting data from the National Securities Depository.
This was a substantial improvement over a net equity FPI inflow of ₹6,153 crore over FY20, according to NSDL data. November 2020 saw the largest net inflow at ₹62,016 crore. India’s first and most sevre lockdown began in March last year, equity markets saw net outflows totalling a massive ₹61,973 crore.
The finance ministry ascribed the improvements to policy initiatives.
Last year in February, the Securities and Exchange Board of India had introduced the common application form for registration of foreign portfolio investors, allotment of Permanent Account Number and carrying out Know Your Customer procedures for opening of bank and demat accounts. Further, the increase in aggregate FPI investment limit in Indian firms from 24% to various sectoral caps led to the increased weightage of Indian securities in major equity indices, mobilising massive inflows into Indian capital markets, the statement said.