Cumulative investment by Foreign Portfolio Investors (FPIs) in India declined in 2018-19, the Economic Survey 2018-19 said.
According to the survey, there was a net outflow in investments worth Rs 5,499 crore in 2018-19, whereas an inflow of Rs 22,466 crore was reported in 2017-18.
“Total cumulative investment by FPIs decreased to Rs 248,154 crore as on March 31, 2019 as against Rs 253,653 crore as on March 31, 2018,” the survey, tabled in the Parliament by Finance and Corporate Affairs Minister Nirmala Sitharaman, said.
“The assets of the FPIs in India, as reported by the custodians, increased to Rs 33,42,680 crore as on March 31, 2019 from Rs 31,48,349 crore as on March 31, 2018.”
However, the notional value of offshore derivative instruments (including ODIs on derivatives) decreased to Rs 77,287 crore from Rs 102,726 crore during the same period.
In terms of mutual funds, the survey said that during 2018-19, there was a net inflow of Rs 109,701 crore in the industry as compared to Rs 271,797 crore during 2017-18.
“The cumulative net assets under management of all MF increased by 11.4 per cent to Rs 23,79,584 crore in March 2019 from Rs 21,36,036 crore in March 2018,” it said.
The survey also showed that resource mobilisation through issuance of corporate bonds private placement stood at Rs 579,425 crore in 2018-19 compared to Rs 599,147 crore in 2017-18.
“During 2018-19, Indian corporates preferred private placement route to gear up the capital requirement,” the survey said. “There were 416 issues which raised Rs 217,632 crore in 2018-19 compared to 460 issues which raised Rs 126,711 crore during 2017-18.”
Besides, 2018-19 witnessed a significant decrease in resource mobilisation through public issue and rights issue of equity compared to the previous year.
“During 2018-19, 123 companies mobilised Rs 16,087 crore through public equity issuance compared to 202 companies amounting Rs 83,696 crore in the previous year, indicating a decrease of 81 per cent over the period,” the survey said.
“Further, during 2018-19, there were 21 rights issues which raised Rs 2,149 crore compared to 21 rights issues which raised Rs 21,400 crore in 2017-18.”
The country’s two key stock indices — S&P BSE Sensex and NSE Nifty50 — witnessed a rise of 17.3 per cent and a gain of 14.9 per cent, respectively, on financial year closing basis in 2018-19.
In addition, during 2018-19, the 10-year benchmark G-sec yields were “volatile and closely tracked the movement in oil prices, domestic liquidity and rupee exchange rate”.
As per the survey, the hardening of yields in the first quarter may be attributed to rising crude oil prices, the firming up of US Treasury yields, concerns regarding the pace of rate hikes by the US Fed, upside risks to domestic inflation.
Later, with the decline in crude oil prices in July 2018, and with the announcement of OMO (open market operations) purchases, the yields softened in July.
“However, the currency depreciation in August 2018 due to rising crude oil prices and rising US interest rates, caused the yields to harden, taking the rise in yields from end-July to mid-September to 40 bps,” the survey added.
“Yields softened towards the end of September reflecting the measures taken for containing rupee volatility along with expectations of lower market borrowings by the central government in second half of 2018-19.”