Tag: FPI

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Beyond

Sebi to review FPI rules, settlement changes

Securities and Exchange Board of India (Sebi) is set to discuss key reforms aimed at making trading easier for foreign investors and improving overall market efficiency.

At its upcoming board meeting, Sebi will consider a proposal to simplify settlement rules for foreign portfolio investors (FPIs). At present, FPIs must settle each transaction separately, even if they buy and sell shares on the same day. This often requires them to arrange large amounts of funds for multiple trades.

The proposed change would allow a “net settlement” system, where investors can offset their buy and sell positions within the same trading cycle. This means they would only need to pay or receive the net difference, reducing the need for excess funds and lowering transaction costs.

Experts say this move could ease liquidity pressure on foreign investors, especially during periods of high trading activity such as index rebalancing. It may also help cut foreign exchange costs that arise due to timing differences between inflows and outflows.

Alongside this, Sebi will also review rules related to market intermediaries, including brokers and other financial entities. The board is expected to examine governance norms and eligibility criteria, often referred to as “fit and proper” rules, to ensure stronger oversight and accountability.

These proposals are part of Sebi’s ongoing efforts to make India’s capital markets more investor-friendly while maintaining safeguards for transparency and risk management. Simplifying processes for FPIs is seen as an important step in attracting more global investment into Indian markets.

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Corporate

FPIs return, pump ₹8,100 cr into Indian stocks

Foreign portfolio investors (FPIs) have returned to the Indian stock market as net buyers, pumping over ₹8,100 crore into equities in early February. This marks the first major inflow after three consecutive months of heavy selling, reflecting renewed optimism following a landmark India‑US trade deal and improving global risk sentiment.

Data from depositories shows FPIs invested around ₹8,129 crore up to 6 February. This is a sharp turnaround from the outflows seen over the past months, where investors withdrew ₹35,962 crore in January, ₹22,611 crore in December, and ₹3,765 crore in November. The selling spree had been driven by global uncertainties, currency volatility, and fears of trade restrictions, which dampened foreign investor confidence.

Analysts say the recent inflows are largely motivated by the interim India‑US trade agreement, which eased geopolitical concerns and boosted expectations for stronger export growth and corporate earnings. “The trade deal has removed some of the uncertainty around bilateral trade, encouraging FPIs to return to Indian equities,” noted a market strategist.

Apart from the trade deal, stabilising domestic and global conditions, a stronger rupee, and lower market volatility have contributed to improved investor sentiment. Positive policy measures and clearer regulatory frameworks have further reassured foreign investors about India’s growth trajectory.

Despite the encouraging inflows, experts caution that this may not signal a long-term reversal yet. “While early February’s data is positive, sustained foreign investment will depend on macroeconomic stability, corporate performance, and the broader global trade environment,” said an economist.

The return of FPIs is seen as a welcome support for the Indian stock market, which had been under pressure from prolonged foreign selling.

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1 Minute-Read

FPIs sell ₹3,963 cr in Indian stocks

Foreign Portfolio Investors (FPIs) remained net sellers in the Indian equity market, pulling out nearly ₹3,963 crore during the past week.

The continued outflow was driven by growing global trade uncertainties and geopolitical tensions, which have made overseas investors cautious about emerging markets, including India. Data from depositories showed that selling pressure intensified towards the end of the week, weighing on overall market sentiment.

Despite the foreign sell-off, domestic institutional investors provided some support, helping limit sharper declines. Market experts say FPI behaviour is likely to remain volatile in the near term, depending on global economic signals and trade-related developments.