MUMBAI – The recently concluded financial year saw foreign portfolio investors make big bets on India, as they poured in more than Rs 2 lakh crore in one of the biggest and booming emerging markets.

What’s interesting to note is that about 50% of this money has chased three sectors during the year.

Data by NSDL showed that FPIs net bought stocks worth Rs 1.08 lakh crore in capital goods, consumer services, and automobile and auto components sectors in FY24.

Capital goods saw the highest inflows of Rs 46,680 crore in the last financial year, and was the only sector to see inflows in each of the months of FY24. The highest inflows was seen in August last year, to the tune of Rs 8,336 crore.

During the last quarter of FY24, FPIs net invested Rs 8,391 crore in the capital goods sector.

The second favourite sector of FPIs was consumer services, where they net invested Rs 32,198 crore in FY24. This sector saw heavy inflows particularly in the last two months of the financial year. In February and March, FPIs bought stocks worth Rs 12,179 crore in the sector. Barring October, this sector witnessed inflows in all the other months of the financial year.The third sector to have grabbed FPIs’ attention is automobiles and auto components. In this sector, FPIs pumped in Rs 29,554 crore in FY24. Barring October 2023 and January 2024, this sector saw inflows in all the other months of the financial year.Let’s take a look at the overall flow structure of FPIs across sectors in FY24 through the table below.

Telecom, healthcare, and financial services were the other three sectors that saw inflows of more than Rs 10,000 crore in FY24.

If not for the heavy selling in the last quarter of FY24, financial services would have been in a better position. In January alone, this sector saw outflows of over Rs 30,000 crore.

Meanwhile, the sectors that were dumped by FPIs in FY24 included metal & mining, oil & gas, media, and chemicals.

Metals & mining sector saw outflows of Rs 8,791 crore in FY24, followed by oil & gas that saw selling to the tune of Rs 6,187 crore.

Who’re the lucky ones in FY25?

The overall outlook for India remains bullish given the positive macroeconomic factors and strong earnings growth momentum.

Even with the general elections round the corner, analysts don’t foresee high levels of volatility as the market is optimistic about a third term for the incumbent government.

Besides, interest rates are seen easing in the US, which will further drive foreign capital flows into emerging markets like India.

“The entire world is looking to India as the growth engine and the last thing you should do is try to time this market. We are in a bull market. The bull market is an animal of its own,” said ultra bullish Rajesh Bhatia, CIO at ITI MF.

Most money managers are betting on domestic themes like manufacturing and consumption and believe there is more leg to the rally in stocks in these sectors.

“We expect that in terms of investment opportunities, the domestic theme represents a very good theme as growth is still intact and valuations are not very demanding,” said V Srivatsa, fund manager – equity at UTI Asset Management.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)


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