India proves to be hot bet as top FPIs gain up to 37%

Mumbai: Foreign institutional investors (FPIs) in India have outperformed major stock market indices during the June quarter, with a significant number of them gaining between 10% and 37% in India's portfolio values. This performance was observed despite the overall market volatility caused by the Iran crisis, surging global shipping rates, and sharp fluctuations in oil prices.

The Prime Database study, using end-of-period portfolio values, highlighted that 75% of the top 20 FPIs experienced this positive trend, outstripping the gains from the Sensex and Nifty indices.

Although the gains may not match the dramatic returns observed in semiconductor markets of South Korea and Taiwan, India's stock market has emerged as a preferred choice for portfolio managers seeking to diversify returns beyond traditional headline indices. Keyur Majmudar, managing partner and chief investment officer at Bay Capital, attributed the success to a combination of stock gains and fresh investments in promising companies, particularly in mid- and small-cap segments.

He noted that recent selling pressure had targeted index-heavy stocks, particularly in the banking and IT sectors, while smaller and newer enterprises had demonstrated strong performance, outpacing the broader market indices.

The comparison with other major markets, such as China (22.2%), Taiwan (46.3%), South Korea (64.24%), and the MSCI Emerging Markets Index (23%), reinforces India's prominence in the global investment landscape. In dollar terms, these markets also outperformed India, underscoring the growing importance of Indian equities in foreign investors' portfolios.