Foreign portfolio investments (FPI), which have touched record highs amid the pandemic, have continued to pour into the Indian equity market post the Union Budget for FY22.
Net FPI inflow into equities in the month of February has been Rs 20,593 crore, as per NSDL data.
Since January, FPIs have invested over Rs 39,000 crore.
S.Ranganathan, Head of Research at LKP Securities said that sectors like private banks, consumer, FMCG and IT have seen foreign flows as Indian companies have exhibited resilience and demonstrated growth post lifting of the lockdown restrictions in Q3.
“We expect foreign flows to be positive in Q4 as well in line with the trend so far as the Budget has been pro-growth with privatisation gaining ground,” he said.
Further, hopes on the Covid vaccination front and the government’s push for capital expenditure and infrastructure boost have also led to positive sentiments among the investors, analysts said.
As per the Budget announcement, the Centre has included amendments to various financial legislations in the Finance Bill, 2021 to permit debt financing of InvITs and REITs by Foreign Portfolio Investors.
In the Budget speech 2021-22, it has been announced that “debt financing of InvITs and REITs by Foreign Portfolio Investors will be enabled by making suitable amendments in the relevant legislations”.
This will pave the way for easy access of finance to InvITs and REITs thus augmenting funds for infrastructure and real estate sectors.