FII investment zooms past $50 bn

$49.98 billion invested in equities, $1.08 billion in debt.

Foreign institutional investors' (FIIs) net investment in India has surpassed $50 billion.

Ever since the government opened the doors for the overseas portfolio investors in 1993, FIIs have invested $49.98 billion in the equities till date.

Taking into consideration their $1.08 billion investments in the debt market, total FII investment, as on on Tuesday, was pegged at $51.06 billion. In rupee terms, their investments were Rs 2,16,048 crore.

Between April 1993, when the FIIs started investing in Indian markets, and now, they have bought shares worth Rs 12,83,336 crore and sold shares worth Rs 10,67,319 crore.

Although their investment aggregated at $50 billion now, the market value of the investment at the current exchange rate of Rs 44.68 per dollar is a whopping $ 117.13 billion (Rs 5,25,280 crore).

This essentially means that apart from the huge dividend that the foreign players have received from the Indian corporations, the value of their investment in India has grown by 135 per cent.

After a decade of lukewarm existence, the FIIs stepped up their investments in Indian market in 2003 when the Indian corporate sector staged a dramatic turnaround, registering net profit growth of over 50 per cent.

The FIIs invested $6.59 billion in 2003 and stepped it up to $8.52 billion in 2004. FIIs' investment touched an all-time high level of $10.70 billion in calendar 2005, when 170 new FIIs got registered with the capital market watchdog Securities and Exchange Board of India (Sebi).

Despite a $1.63 billion selloff in May this year when the benchmark Sensex lost over 30 per cent, their investment in Indian markets touched $8.88 billion in the current calendar year.

With the valuation of Indian shares becoming attractive post June 14 when the Sensex dipped below the 9000-mark after touching 12,600 in mid-May, the FIIs pored in $6.60 billion between July and November 2006. Overall, 993 FIIs have registered with Sebi and the list has been growing.

However, post May correction, FIIs have become a bit choosy. Almost three-fourth of their investment has been in frontline Sensex and Nifty stocks, while the rest of the investment is spread across 300-odd companies. Sensex comprise 30 stocks and the Nifty basket has 50 stocks.

FIIs currently hold over 40 per cent stake in 12 companies. Their holding in 45 corporations hover between 25 per cent and 40 per cent and in 243 firms it varies between 10 and 25 per cent.

Overall, they hold 10 per cent or more stakes in 300 Indian companies and 5-10 per cent stake in 181 companies.

"Going forward, their presence in India can only get strengthened as there are not too many markets that promise higher returns than India," said the head of a local brokerage.