FPI Net Outflows from India Cross Rs 2 Lakh Crore Mark

Foreign portfolio investors (FPIs) have net withdrawn over Rs 2.1 lakh crore from the Indian stock market in the current year, crossing the Rs 2 lakh crore mark for the first time ever. This outflow has resulted in aggregate foreign holding in Indian stocks falling to a 14-year low of 14.7%, according to a report by JM Financial.

The bulk of the outflow occurred in March, with FPIs net selling Rs 1.04 lakh crore, followed by Rs 60,847 crore in April.

Analysts at Goldman Sachs estimate that the downside risk of incremental foreign selling could be limited at about $4-5 billion, translating to nearly Rs 50,000 crore at the upper end of the band.

The report notes that while the bulk of foreign selling is likely over, foreign re-buying may still be impeded in the near term due to factors such as oil prices, earnings revisions, and valuations. The court will resume hearing on the impact of FPI outflows on the Indian economy, with market experts expecting a volatile trading session ahead.