Moody's ratings upgrade to boost FPI investment in debt market

FPIs have pumped in over $22 bn in debt market this year compared with $8 bn in equities

Global rating agency Moody’s upgrade of India’s sovereign ratings is likely to boost inflows from foreign portfolio investors (FPIs) into Indian equities, albeit marginally. The demand for Indian bonds, however, will surge, even as existing FPIs in the debt market benefit from softer yields.
 

FPIs have pumped in over $22 billion into the debt market this year, compared with $8 billion into equities. Taiwan, Mexico, South Korea and China have got a higher share of equity inflows from FPIs than India.

“Indian bonds have remained attractive this year, owing to the high nominal yield and appreciation in the rupee. Both factors