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PRESS RELEASE
October 30, 2003
PR No.264/2003

FII INVESTMENT IN INDIA

This Press release is issued in response to the news item which appeared in a financial newspaper on 30th October, 2003.  The news item refers to contribution of investment by NRIs through the FII route in India.  According to the data available with SEBI, out of the total net investment of Rs.72,965 crores in equities as on September 30, 2003, 84% is held by Mutual Funds, Asset Management Companies, Investment Companies, Banks, Pension Funds, etc.  The broad constituents of FII investments are:

 

FII Class

Net Investment

(Rupees in Crores)

% to total

Mutual Funds   

20,449

  28

Investment Companies

10,918

  15

Private Companies

  8,990

  12

Investment Adviser

  4,137

    6

Pension Fund

  3,116

    4

Investment Trust

  2,981

    4

Government and Multilateral Agencies

  2,975

    4

Public Companies

  2,768

    4

Banks

  1,116

    2

Investment Fund and Investment Management Companies

  1,157

    2

Unit Trust

     993

    2

Insurance Companies and Endowment Funds

     527

    1

Others

12,838

  16

Total

72,965

100

508 entities are registered as FIIs with SEBI as on 30th September, 2003.  It is to be noted that all the FIIs who are investing in Indian Market are registered and regulated by the respective overseas regulators in their home countries.  The private companies are generally broad based, but not listed on any exchange. Further, the investments of private companies are routed through FIIs which are regulated entities duly registered here.

Out of these entities, only 12 registered FIIs have issued Participatory Notes (PN) outstanding as on 30th September, 2003.  The total value of underlying investment in equity represented by the PNs is Rs.19,125 crores. Analysis of PN Reports submitted by the 12 FIIs as on 30th September, 2003 indicates that the underlying investments in equities represented by PNs are diversified across over 200 scrips.  The FIIs issuing PNs have also furnished confirmations to SEBI that they / their associates / clients have not issued the PNs directly or indirectly to OCBs.  It may be seen that the above data does not warrant or support any inference that NRIs have contributed a substantial percentage of the outstanding FII investment.  The news item in question referring to the NRI contribution forming nearly 40% of the FII investment is therefore conjectural in nature.