The Hindu Business Line : FII investment grows 1,602 pc last fiscal at Rs 45,767 crore

FOREIGN institutional investors (FIIs) made net investments of Rs 45,767 crore during 2003-04, clocking a growth of 1,602 per cent over the previous year, a record in the history of FII investment in India, according to the annual report of the Securities and Exchange Board of India (SEBI).

Gross purchases by FIIs during the year amounted to Rs 1,44,858 crore, a growth of 208 per cent compared to the year before.

FIIs have maintained positive net investments, indicating higher value of purchases over sales, for all twelve months of the year under review.

The highest amount of purchases were made in March 2004 at Rs 19,224 crore, while highest sales took place in January 2004 at Rs 13,783 crore, according to the report.

The SEBI's analysis of the trends of FII investments in India indicates that "their open interest in stock futures is higher, accounting for about 80 per cent of the total open interest and their investment in index options is the lowest. Index futures scored a distinctive second position, while stock options attracted a negligible investment".

Similarly, assets under management of mutual funds also increased significantly during the year. The increase of Rs 46,809 crore in mutual fund investments registered a growth of 1,015 per cent over the previous year.

Private sector mutual funds mobilised Rs 5,34,650 crore with a market share of 90.59 per cent while public sector mutual funds and UTI together mobilised Rs 31,548 crore and Rs 23,992 crore, respectively (market share of 5.35 per cent and 4.07 per cent, respectively).

Income funds dominate the mutual fund scene. This is in terms of number of schemes, gross funds mobilised, repurchases and net inflows. There were 197 income funds, 169 growth funds, and 37 balanced schemes as on March 31, 2004 according to the report.

Income schemes mobilised Rs 5,60,973 crore during the year, while growth and balanced schemes raised Rs 26,695 crore and Rs 2,523 crore, respectively. These two classes account for less than five per cent of the total mobilisation.

Income schemes also dominated repurchases at Rs 5,21,368 crore with 95 per cent share. "When analysed in terms of net inflow, these three classes have received Rs 39,603 crore, Rs 7,219 crore and a negative amount of Rs 13 crore, respectively," said the report.

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