Sat Nov 09 22:53:27 UTC 2024: ## New FPIs Flock to India Despite Ongoing Sell-Off

**MUMBAI, INDIA** – Despite a sustained sell-off by foreign portfolio investors (FPIs) in the Indian market since October, a wave of new FPIs is eager to enter the country, submitting about 40-50 applications for registration with the Securities and Exchange Board of India (Sebi) this month.

This surge in interest is attributed to a combination of factors, including India’s political stability, long-term growth potential, and attractive yields.

“Despite the ongoing sell-off by funds since last month, this month saw an unprecedented number of applications of about 40-50 new FPI registrations which are eyeing to enter the Indian market,” said Manoj Purohit, partner & leader, Financial Services Tax, Tax & Regulatory Services, BDO India.

Sebi’s recent policy changes, including allowing non-resident Indians (NRIs) to participate up to 100% in FPIs and simplifying registration processes, have further encouraged foreign investment.

The current FPI selling, primarily attributed to high valuations and slowing earnings, is expected to continue in the near term. However, experts anticipate a shift towards buying if Q3 results indicate earnings recovery.

“If the Q3 results and leading indicators reflect recovery in earnings, the scenario can change with FPIs reducing selling and even turning buyers. Investors will have to wait and watch for the data,” said V K Vijayakumar, chief investment strategist, Geojit Financial Services.

The recent US election results have also instilled optimism in the Indian market, with experts citing the potential for strengthened strategic partnerships and economic collaborations between the two countries.

“We may see FPI inflows into the equity and debt segments turning green in the coming few trading cycles,” Purohit said.

The continued influx of new FPIs, despite the current market challenges, highlights the ongoing appeal of the Indian market. While the short-term outlook remains uncertain, India’s fundamental strengths and government policies continue to attract foreign investment.

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