E] FOREIGN INSTITUTIONAL INVESTORS


At the end of 1997-98, 496 FIIs were registered with SEBI and they had made cumulative net investments of US$ 9,284.3 million in Indian securities markets. In 1996-97, net FII investment, at US$ 2,431.9 million was at its highest yearly level since FIIs began investing in Indian securities markets. In 1997-98, net FII investment was US$ 1,650.1 million, a decline of 32 per cent from its 1996-97 level. In 1997-98 monthly net FII investment turned negative for the first time. Monthly net FII investment was negative in November 1997, December 1997 and January 1998. In these months, FIIs made net sales of US$ 372.6 million. Monthly net FII investment turned positive in February and March 1998, when FIIs made net investments of US$ 190.2 million and US$ 183.2 million respectively. The decline in the overall level of net FII investment in 1997-98, and the period of negative monthly net FII investment towards the end of the year can be largely attributed to some extent to the events in South East and North Asia since July 1997, when the central bank of Thailand permitted the Thai Baht to float, reversing its earlier policy of maintaining a pegged exchange rate. These events, and their impact on Indian markets and on FII inflows are described below.

Table II.17 gives details of investments by FIIs since 1992-93. Table II.18 gives the details of monthly investment by FIIs in 1996-97. Figure II.6 gives the monthly trend in FII investment. Figure II.7 gives movement of monthly purchases and sales by FIIs.

Table II.17: Yearly Trends in FII Investment

Month Gross Purchases (Rs. Cr) Gross Sales  (Rs. Cr) Net Investment (Rs. Cr) Net Investment US$ m at monthly ex rate
1992-93
17.4 
4.0 
13.4 
4.2 
1993-94
5,592.5 
466.3 
5,126.2 
1,634.0 
1994-95
7,631.0 
2,834.8 
4,796.3 
1,528.3 
1995-96
9,693.5 
2,751.6 
6,942.0 
2,035.7 
1996-97        
Equity†
15,525.0 
6,979.4 
8,545.5 
2,423.8 
Debt‡
28.9 
0.0 
28.9 
8.1 
Total 1996-97
15,553.9 
6,979.4 
8,574.5 
2,431.9 
1997-98        
Equity
17,338.1 
12,071.2 
5,266.9 
1,462.6 
Debt
1,356.6 
666.1 
690.5 
187.5 
Total 1997-98
18,694.7 
12,737.2 
5,957.5 
1,650.1 
Grand Total
57,182.9 
25,773.3 
31,409.7 
9,284.3 

 
†Investment by FIIs investing through the equity 70:30 route, ‡Investments through the 100% debt route. Figures may not add exactly due to rounding.

Source: SEBI

Table II.18: Monthly FII Investment in 1997-98

Month Route Gross Purchases  (Rs. Cr) Gross Sales (Rs. Cr) Net Investment (Rs. Cr) Net Investment US$ m at monthly ex rate Cumulative Net Investment US$ m at monthly ex rate
April `97 Equity†
1,214.4 
712.7 
501.7 
140.1 
  
  Debt‡
132.7 
49.2 
83.5 
23.3 
  
  Total
1,347.0 
761.9 
585.1 
163.4 
7,797.6 
May Equity
1,329.5 
614.3 
715.2 
199.7 
  
  Debt
63.7 
16.1 
47.6 
13.3 
  
  Total
1,393.2 
630.4 
762.8 
213.0 
8,010.6 
June Equity
2,601.8 
1,282.5 
1,319.3 
368.4 
  
  Debt
302.6 
139.0 
163.7 
45.7 
  
  Total
2,904.4 
1,421.5 
1,482.9 
414.1 
8,424.7 
July Equity
1,922.2 
942.3 
979.9 
274.2 
  
  Debt
83.3 
57.8 
25.5 
7.1 
  
  Total
2,005.5 
1,000.1 
1,005.4 
281.3 
8,706.0 
Aug Equity
1,601.4 
1,063.4 
538.1 
149.8 
  
  Debt
39.0 
70.6 
(31.6)
(8.8)
  
  Total
1,640.4 
1,134.0 
506.4 
141.0 
8,847.0 
Sep Equity
1,414.4 
783.4 
631.0 
173.2 
  
  Debt
41.3 
72.4 
(31.0)
(8.5)
  
  Total
1,455.7 
855.8 
600.0 
164.7 
9,011.7 
Oct Equity
1,600.2 
966.7 
633.5 
174.9 
  
  Debt
393.1 
41.8 
351.3 
97.0 
  
  Total
1,993.2 
1,008.5 
984.7 
271.8 
9,283.5 
Nov Equity
1,093.3 
1,505.2 
(411.9)
(110.6)
  
  Debt
5.0 
143.2 
(138.3)
(37.1)
  
  Total
1,098.2 
1,648.4 
(550.2)
(147.8)
9,135.8 
Dec Equity
934.7 
1460.9
(526.2)
(134.2)
  
  Debt
0.0 
52.4 
(52.4)
(13.4)
  
  Total
934.7 
1,513.3 
(578.6)
(147.5)
8,988.2 
Jan ` 98 Equity
772.9 
1,074.7 
(301.8)
(76.6)
  
  Debt
0.0 
2.5 
(2.5)
(0.6)
  
  Total
772.9 
1,077.2 
(304.3)
(77.3)
8,911.0 
Feb Equity
1,489.1 
754.5 
734.6 
188.9 
  
  Debt
5.0 
0.0 
5.0 
1.3 
  
  Total
1,494.1 
754.5 
739.6 
190.2 
9,101.2 
Mar Equity
1,364.3 
910.7 
453.6 
114.8 
  
  Debt
290.9 
21.0 
269.9 
68.3 
  
  Total
1,655.2 
931.7 
723.5 
183.2 
9,284.3 
  Total Equity
17,338.1 
12,071.2 
5,266.9 
1,462.6 
  
  Total Debt
1,356.6 
666.1 
690.5 
187.5 
  
  Grand Total
18,694.7 
12,737.2 
5,957.5 
1,650.1 
  

 
†Investment by FIIs investing through the equity 70:30 route, ‡Investments through the 100% debt route, negative figures in brackets. Figures may not add exactly due to rounding.

Source: SEBI

Figure II.6: Monthly Trends in FII Investment

Figure II.7: Monthly Trends in Purchases and Sales by FIIs