FPI activity increasing in non-secondary market

In September, foreign portfolio investors (FPIs) net sold Rs 6,475 crore equity on Indian bourses, but their net investment of Rs 4,612 crore in non-exchange trades was the highest in the past six months.



Primary markets and other segments include IPO, QIP, rights issue, preferential offers and stock buybacks by companies.

Last month, there were two mid-sized IPOs — of Prabhat Dairy and Sadbhav Infrastructure projects — raising a total of Rs 940 crore, while funds mobilised through rights and QIPs totalled Rs 4,200 crore.

In 2014, there was a net inflow of Rs 97,000 crore, of which Rs 11,600 crore was investments in non-exchange markets. However, a comparison with last year’s figures may not be appropriate as FPI inflow was significantly higher across segments.

Nonetheless, the data bears out the fact that it may be erroneous to gauge the FPI strategy by simply going through the secondary market deals on stock exchanges.