Foreign Institutional Investors’ affair with Indian stock markets

Foreign Institutional Investors importance has grown in the emerging economies during the recent years. In developing countries like India we can see highest volume of foreign institutional investments. On the backdrop of Brexit, this has gained more prominence.

Who are FII’s?

Foreign Institutional Investors can be viewed as a catalyst in Indian equity market. Foreign Institutional Investors or investment funds are registered in a foreign country, other than the one in which investing. FII notably includes hedge funds, insurance companies, pension funds, university funds, endowments, foundations, sovereign wealth funds, charitable trusts, mutual funds and asset management companies, investment managers, advisors or institutional portfolio managers set up or owned by NRI’s. In India, FII’s need to register themselves in SEBI and they are regulated by Reserve Bank of India.

FIIs in India in the month of June-2016



In 2016, during 8-14 June-2016, we can see heavy buying by FIIs. After June 15, 2016, we can observe sell off by FIIs. Indian market has experienced a cautious move by FIIs after June 15, 2016 due to many events like Brexit, Federal Reserve’s rate hike uncertainty, currency fluctuations, Mauritius Tax Treaty, etc.

FIIs are amongst the major sources of liquidity in Indian market. High volume of FIIs indicates their high confidence in Indian market plus gives hint to domestic investors about the strong base at home ground. But with the current global turmoil in international market, FIIs have become more cautious in Indian market. Still we can sense FII confidence in Indian market as there is no huge sell off. Recent domestic events like good monsoon, 7th pay commission, Entertainment Act, National Mineral Exploration Policy, etc., are helping Foreign Institutional Investors to hold their nerves.

On this note we have analysed FII investment in Indian companies over the last two quarters i.e. Q4FY16 and Q3FY16. On the basis of this factor we have picked up our top five performers, whose Foreign Institutional Investors count has increased in Q4FY16 over the previous quarter.

Our top five performers are- Bharti Infratel, Ipca Laboratories, Bank of India, Mindtree and V-Mart Retail.


Top performer Bharti Infratel has successfully attracted FIIs’ investment with highest growth by 184 per cent in Q4FY16 vs Q3FY16.

We would like to watch the moves taken by FIIs in Indian market in Q1FY17 after so many dramatic events that have unfolded on the global and domestic stage.