Foreign institutional investors (FIIs) have invested a whopping Rs 809 billion in the June quarter of 2023, in a major turn-around from the Rs 247.8 billion outflow in the previous quarter, according to data from the Centre for Monitoring Indian Economy (CMIE).
The inflow of funds from domestic institutional investors was Rs 304 billion in the March quarter, underscoring their continued confidence. The data further show that there has been a steady inflow of funds from domestic mutual funds. In the last 12 quarters, mutual funds were the net buyers. The period between the September 2021 quarter and June 2022 quarter saw the highest inflow of funds from domestic mutual funds.
In the December quarter of 2022, the FII inflow was Rs 399.4 billion compared to Rs 143.7 billion from domestic mutual funds. The September quarter of 2022 also saw one of the biggest FII inflows at Rs 545.4 billion, more than Rs 120.3 billion from domestic investors.
However, the March and June quarters of 2022 were the worst months for FII investments, when the country saw a mass exodus of foreign institutional investors from the domestic market.
In March 2022, the FII outflow was Rs 1,166.6 billion compared to an inflow of Rs 690.2 billion from Indian mutual fund investors. Also, in June 2022, the FII outflow was Rs 1,106.3 billion compared to Rs 594.6 billion from domestic institutional investors.
What AMFI Data Show
The May data from the Association of Mutual Funds in India (AMFI) show that overall investment in equity funds reduced by half in May, with large caps seeing the biggest outflow.
For instance, equity inflow was Rs 3,240.30 crore in May compared to Rs 6,480.29 crore the month before. Large caps saw the biggest outflow in May, at Rs 1,362 crore.
While the inflow and outflow numbers have been constantly changing in the recent months, the persistent growth in mutual fund folios indicates investors’ continued belief in the industry.
For instance, in May, the AMFI data show that the total number MF folios climbed to an all-time high of 14,73,75,502, with retail AUM touching around Rs 21,76,840 crore. The number of retail scheme folios comprising equity, hybrid, and solution oriented schemes were 11,76,37,747.
Releasing the data, AMFI stressed that despite various headwinds, the market has performed reasonably well, with the industry’s net AUM at Rs 43.20 lakh crore as on May 31, 2023.
The systematic investment plans (SIP) saw the highest ever contribution of Rs 14,748.68 crore, indicating that SIPs are the preferred instrument for wealth creation among retail investors.
