FIIs pump $5.7 billion into Indian securities in May

Overseas investors have pumped in Rs33,778 crore ($5.7 billion) into Indian securities, including Rs14,006 crore ($2.35 billion) in equities and Rs19,772 crore ($3.35 billion) in debt securities, in May.

This is the highest monthly inflow in about two and a half years, according to data available with market regulator Securities and Exchange Board of India (SEBI).

FIIs were gross buyers of debt securities worth Rs40,478 crore in May, while they sold bonds to the tune of Rs20,706 crore during the same time. This translates to a net inflow of Rs19,772 crore ($3.35 billion) for the month.

This was the highest monthly net inflow since December 2011, when FIIs had made a net investment of Rs 21,774 crore in the debt market.

The net inflow of last month came after foreign institutional investors (FIIs) pulled out net Rs9,200 crore from markets in April.

As per the latest data compiled by SEBI, FIIs have invested around Rs51,433 crore into Indian equity markets and Rs52,115 crore in the debt market so far this year, taking overall investment in Indian securities to Rs1,03,548 crore ($17 billion) so far this year.

FIIs, who were net buyers in the debt market for four consecutive months, turned net sellers in April after they were restrained from investing in short-term securities like treasury bills.

The strong inflows in the recent months have taken the net investment by FIIs to Rs52,115 crore ($8.21 billion) in Indian debt market so far this year.

FIIs, the main driver of the equity market, have helped push up the benchmark BSE Sensex by over 20 per cent so far this year.

Foreign investors had made a net investment of Rs62,288 crore into the country's securities market in 2013 (January-December). This included a net investment of Rs 1,13,000 crore in equities, while they pulled out a net amount of Rs50,848 crore.

Currently, there are over 1,700 registered FIIs in the country, along with close to 6,400 sub-accounts.

The strong inflows in the recent months have taken the cumulative net investment of FIIs in India to close to $188 billion (about Rs9,00,000 crore).