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Will FII Flows Break The Record Rs 2.73 Lakh Crore Seen In FY15?
FY15 saw the highest debt-equity flows from FIIs since ’91

UR Bhat
Managing director, Dalton Capital Advisors

Foreign flows will only pick up as domestic issues get resolved, foremost among which is the revival in investment cycle. Though the new government has shown resolve in addressing business issues, there is not much impact on the ground. For the investment cycle to turn around, stalled projects have to kick off. Only when demand revives will India Inc look at fresh investments. It might take a couple of years for things to improve. While the market is factoring in an earnings upgrade, the current fiscal will not be a great year in terms of corporate performance. Also, liquidity flows into the markets because of quantitative easing in Europe and Japan cannot continue indefinitely. And if the US Fed hikes interest rates, you will suddenly see investors pulling out of emerging markets and investing in US treasuries. To top it off, we have geo-political tension in the Middle East and EU-Russia. In such situations, higher FII flows are not a given.


Jitendra Sriram
Head of research, HSBC Securities & Capital Markets (India)

The RBI has just started on its interest rate easing cycle with two rate cuts and this is likely to continue in FY16 as well. So, investors who have bought Indian bonds and other debt instruments will see more upside to their holdings. The fiscal and current account deficits are also under control, making the risk on the rupee owing to foreign exchange vulnerability a lot lesser, thus bringing down the hedging costs of overseas investors. Also, if the telecom and coal auctions are any indication, you will slowly start seeing a recovery in the investment cycle. If the cap on FII debt investments is further raised from $25 billion to $30 billion, FII flows will increase. Equity inflows could, however, be slightly less due to the fact that last year saw an explosion of inflows because of the euphoria by investors about a stable pro-business government with a clear mandate. On the whole, though, I believe FII flows will be robust.

The Inside Story

Jugal Kishore Arora, Kohinoor Foods

  • Bought 100,000 shares @ Rs 50.85 per share
  • Holds 16.05% stake*

P Vemuri Sastri, Reliance Industries

  • Sold 1,520 shares @ Rs 858.97 per share
  • Holds 0.01% stake

Kamal K Sharma, Lupin

  • Sold 5,000 shares @ Rs 1,915.33 per share
  • Holds 0.02% stake

Shanita D Jain, DB Realty

  • Bought 49,497 shares @ Rs 69 per share
  • Holds 0.06% stake*

Abhijit Mukherjee, Dr Reddy’s Laboratories

  • Bought 3,359 shares @ Rs 3,482.58 per share
  • Holds 0.02% stake

R Natrajan, Tube Investments of India

  • Sold 10,410 shares @ Rs 370.57 per share
  • Holds 0.02% stake

Note:* Promoter’s stake in personal capacity. This holding does not include other investment companies and persons acting in concert. Insider trades from 19-25 March, 2015

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