How were the FPI flows in the month of December overall? Have they been at the same level as in November this year?

If November was a month heavy on FPI flows into India, then December was no different. In fact, the month of December turned out to be the best for FPI flows into equities and the second best in 2020 in terms of overall FPI flows into equity and debt put together. This was largely driven by risk on sentiments in the markets.

Let us look at the numbers, which are simply humungous. Foreign portfolio investors or FPIs infused Rs.62,016 crore into equity and Rs.6,542 into debt during the month of December 2020, taking the total infusion to Rs.68,558 crore. In fact, through the month, even as domestic institutions were selling, the FPIs showed little respite in buying into India.

The FPI buying of Rs.62,016 in equities in the month of Dec-20 is slightly higher than the Rs.60,358 that FPIs pumped into India in the month of November. For the year 2020, the total net FPI infusion into equities stood at Rs.167,500 crore of which 85% came in the last quarter alone, with the chunk of the flows coming in November and December.

Two factors that attracted FPI money were the return of growth in the economy and the corporate bottom lines. Apart from growth and liquidity, the vaccine also added to investor confidence for creating risk-on positions in EMs. In fact, FPIs have turned risk-on across emerging markets and India has been one of the biggest beneficiaries.