Net investments by foreign institutional investors in the domestic market now stand at $5.97 billion. This is almost double the previous best of $3.05 billion in 1996.
Of the $5.97 billion (Rs 27,731 crore) net foreign institutional investment till November 12, 2003, investment in equity stands at around $5.1 billion, while the rest is in debt.
The number of foreign institutional investors registered with the Securities and Exchange Board of India has also risen from 509 at the end of September to 514 on November 12, 2003.
Market sources pointed out that opportunities available in the domestic market had led to a proliferation in the number of foreign entities entering the country.
October witnessed the highest monthly net flow into the market at $1.47 billion (Rs 6,862.60 crore). Also, there has been an exponential rise in inflow between September and October.
While September recorded a net inflow of $0.96 billion, October recorded $1.47 billion. In the first nine trading days of November, foreign institutional investors have pumped in $0.57 billion.
V V L N Sastry, country head, First India Equity Advisors, said: "Having invested close to $6 billion in the Indian market, foreign funds will have to wait till a conducive environment is created among retail investors, before they exit."
J Venkatesan, fund manager at Canbank Mutual Funds, said: "We believe that the Indian market continues to be more attractive than other emerging markets on higher earning estimates. Also, the appreciation of the rupee has given foreign investors an additional opportunity."
However, informed sources said there were apprehensions in the market that investments by foreign institutional investors might taper towards the end of the year, when they were expected to book profits to meet year-end obligations in their own countries.
This may force some foreign institutional investors to pull out money. However, there seems to be no consensus on whether all foreign institutional investors will pull out, or those who came in late will continue shopping.
