Key Points of Adani Share Block Deal:
- Foreign investors invested Rs 7,936 crore in Indian equities in March, driven by bulk investment in Adani Group companies by US-based GQG Partners.
- Adjusted for the GQG investment, the net flow is still negative, indicating that FPIs have withdrawn money in March.
- FPIs have been selling their holdings in Indian equities but have turned buyers in the last few days, and the near-term outlook for FPIs is positive, according to the Chief Investment Strategist at Geojit Financial Services.
- FPIs have been consistent buyers in capital goods and have alternated between buying and selling in the financial services space.
- FPIs have pulled out Rs 2,505 crore from the debt market during the period under review, after their investments in January and February.
- The impressive turnaround in the current account deficit (CAD) could be a factor that prevents FPIs from turning aggressive sellers, as FPIs have pumped in a net sum of Rs 7,396 crore in Indian equities in March.
- The outlook is mixed as interventions by governments and central banks globally have stabilized markets, which should have some positive impact on FPI flows in the near-term.
- India and Indonesia witnessed inflows during the month under review, while Philippines, South Korea, Taiwan, and Thailand saw a net withdrawal, and the Indian Rupee is likely to be stable going forward.
Details of Adani Share Block Deal:
Foreign investors have invested a whopping Rs 7,936 crore in Indian equities in March. This investment has been mainly driven by bulk investment in Adani Group companies by US-based GQG Partners. However, if the GQG investment in Adani Group is adjusted, the net flow is still negative, indicating that FPIs have withdrawn money in March, according to Sanchit Garg, Co-founder & CEO, GLC Wealth Advisor LLP.
Foreign Portfolio Investors (FPIs) have been selling their holdings in Indian equities, but the trend seems to be reversing as they have turned buyers in the last few days. The Chief Investment Strategist at Geojit Financial Services, V K Vijayakumar, has said that the near-term outlook for FPIs is positive. Even though Indian valuation continues to be relatively high, the recent market correction has made valuations more reasonable than earlier.
The impressive turnaround in the current account deficit (CAD), which has improved substantially due to rising exports, could be a factor that prevents FPIs from turning aggressive sellers. According to the data with depositories, FPIs have pumped in a net sum of Rs 7,396 crore in Indian equities in March.
FPIs have been consistent buyers in capital goods and have alternated between buying and selling in the financial services space. On the other hand, FPIs have pulled out Rs 2,505 crore from the debt market during the period under review. This was after their investment of Rs 3,531 crore in January and Rs 2,436 crore in February.
The outlook is mixed as interventions by governments and central banks globally have stabilized markets, which should have some positive impact on FPIs flows in the near-term. However, this will lead to renewed concerns on inflation down the line, which may lead to outflows at some point over the next few months. GLC Wealth Advisor LLP’s Garg believes that India is better placed compared to other nations, and the long-term growth story still stays intact.
India and Indonesia witnessed inflows during the month under review, while Philippines, South Korea, Taiwan, and Thailand saw a net withdrawal. Going forward, the Indian Rupee is likely to be stable, and FPIs may not turn aggressive sellers due to domestic factors like the impressive turnaround in CAD.
About Adani Group:
The flagship company Adani Enterprises is part of the Adani Group, which is an Indian multinational conglomerate headquartered in Ahmedabad. Gautam Adani founded the company in 1988 as a commodity trading business.
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