Business News: Continued Strong Inflow Expected from FIIs and FPIs in India for FY25 Following Record Inflow in FY24

Foreign institutional investors (FIIs) and foreign portfolio investments (FPIs) are showing a strong interest in the Indian market, with a record inflow expected in FY25. The surge in investment comes on the back of robust economic growth and momentum in earnings growth.

In FY24, the Indian stock market witnessed a historic surge in investment, with foreign investors bringing in over Rs 3,39,064 crore, the highest-ever investment in India’s stock market. However, during the same period, there was a significant decline in Foreign Direct Investment (FDI), with a 9% drop to INR 2,65,030 crores.

Market expert Ajay Bagga attributes the decline in FDI to a global funding winter affecting the VC/PE arena, as well as overcapacity in many sectors. He predicts that FDI is expected to pick up by FY26 as private capex increases in India, driven by various sectors hitting capacity utilization constraints.

While the decline in FDI may signal low confidence among foreign investors in India’s economy, the uptrend in FIIs and FPIs investment, as well as the strength of DIIs investment and retail investment in mutual funds, suggest a positive outlook for the Indian economy. Experts believe that by FY26, private capex in India will increase substantially.

Overall, the influx of FIIs and FPIs in the Indian market is expected to remain strong in FY25, indicating a positive sentiment towards India’s economic growth and investment opportunities.