New Delhi. With the start of the Lok Sabha elections, foreign portfolio investors (FPIs) started keeping distance from the Indian stock market, as the volatility in the market had increased significantly during that period. When the voting in the initial phases was less than expected, the concern of foreign investors increased and they increased the selling.

But now, after the formation of the NDA government under the leadership of PM Narendra Modi, the worries of foreign investors have been allayed to a great extent and they have started investing again. If we look at the data till June 21, foreign investors have made a net investment of Rs 12,170 crore in the Indian stock market. Experts believe that this trend will continue further.

This is the reason for the return of foreign investors

In May, there was a lot of uncertainty in the minds of foreign investors about the election results. They had made a net withdrawal of Rs 25,586 crore from shares. But now they know that the Modi government has returned to power, and most of the ministries are also under the charge of the same old ministers. In such a situation, the government will try to increase economic growth by continuing its old policies.

According to depository data, due to election uncertainty, FPIs withdrew Rs 25,586 crore from equity markets in May and Rs 8,700 crore in April. Apart from this, FPIs have also withdrawn in the last few months due to changes in the tax treaty with Mauritius and increase in US bond yields.

With the fresh investment, the total withdrawal of FPIs from equity in the calendar year 2024 has come down to Rs 11,194 crore. Sunil Damania, Chief Investment Officer, MojoPMS, says that due to high valuations, FPI investment in equity markets will remain limited in the coming times as well. In the calendar year 2024, FPIs have been making withdrawals so far except in March.

10 thousand crore investment in debt markets

Foreign portfolio investors continue to be buyers in the domestic bond markets. FPIs have invested Rs 10,575 crore so far in June. FPI investment in the bond market in 2024 has increased to Rs 64,244 crore.