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FPI investors leave India with lifetime high withdrawal; pullout more in March than in full year 2018

Samrat Sharma
FPI, foreign portfolio investments, FPI investors, indian stock market, indian market, investors shy away

Foreign portfolio (FPI) investors have whitewashed Indian market with a lifetime high withdrawal of more than Rs 1 lakh crore in the month of March, with 6 days still remaining. Panic and a lack of confidence of the investors can be understood with reference to the year 2018, which was considered grim in terms of FPI. In the full year 2018, Rs 80,000 crores were pulled out from the Indian market, while in only one month of March 2020, more than Rs 1 lakh crore has been taken away by the FPI investors, according to National Securities and Depository Limited (NSDL).

Amid Covid-19, stock markets across the globe have seen a slump, however, the Indian stock market has seen higher volatility.  Since the beginning of March, Sensex has slipped 29 per cent so far. With travel restrictions and a complete lockdown, businesses and trade have come to a standstill, making the stock markets feel the pain too.

Also Read: Will March 2020 see highest FPI withdrawal in history? Foreign investors shy away from India

In the month of January and February, FPI in the Indian market was Rs 957 crores and Rs  8,970 respectively, however as the cases of Covid-19 started to appear in India, the FPI investors also started to keep away from the country’s market. The condition of FPI in India is grim in the past two financial years. While FY19 saw a net FPI withdrawal of Rs 38,930 crores, the same is Rs 15,925 crores in the current fiscal so far.

Meanwhile, the global uncertainty due to coronavirus scare has put the investors on risk, making them exit the market. Also, the future in the near-term is likely to depend on how the Covid-19 pandemic will play its role. With the rising number of cases across India, the near-term outlook is still gloomy.