After pumping in $9 bn, FPIs in retreat mode on valuation concerns

Since October, overseas investors have yanked out close to $2.6 bn

After pumping close to $9 billion into domestic stocks, foreign portfolio investors (FPIs) are in retreat mode. India has been one of the best-performing major markets globally this year. The withdrawal began in early October, quickly gathered pace, and plateaued in recent trading sessions. The year-to-date investment rally of FPIs is now down to below $6.2 billion.

Profit-taking, amid concerns about expensive valuations, policy normalisation, and large initial public offerings (IPOs), is a key reason behind the recent FPI sell-off.

“India has done exceptionally well vis-à-vis its emerging market (EM) peers. There is a bit of profit-taking more than anything