Finance Minister Nirmala Sitharaman on Monday lauded retail investors for providing ‘shock absorbing capacity’ to the Indian stock market, making it resilient to large pull out by foreign investors in FY22.

“FIIs (Foreign Institutional Investors) and FPIs (Foreign Portfolio Investors) may come and go but today, ... any shock that may come is now taken care of because of the shock-absorbing capacity the Indian retailer has brought into the market,” she said while responding to a supplementary question raised by Shashi Tharoor, Congress MP, in the Lok Sabha.

According to data from SEBI and NSDL, FPIs were net sellers (deduction gross sell from gross buy) amounting ₹1.40-lakh crore at the end of FY22. However, during the same period, Domestic Institutional Investors (DIIs) emerged as net buyers with an amount of ₹2.21-lakh crore.

Data from Prime Database show the average number of applications from retail in public offerings was 14.05 lakh, in comparison to 12.73 lakh in 2020-21 and 6.88 lakh in 2019-20. The amount of shares applied for by retail by value was 17 per cent higher than the total IPO mobilisation (147 per cent in 2020-21) showing the strength and interest of retail investors during the year. However, the total allocation to retail was just ₹22,017 crore, which was 20 per cent of the total IPO mobilisation (down from 32 per cent in 2020-21).

“I think we as a House should stand up and appreciate the Indian retailor who has invested a lot of confidence in the stock market today in India,” Sitharaman said, triggering a round of appluase from the treasury benches. Irked by the “running commentary” offered throughout her response by some Opposition MPs, particularly the TMC member Sougata Roy, Sitharaman said: “I wish he would get up and seek a clarification after I have finished rather than have small-time satisfaction of interrupting.”

She said instead of looking at FIIs and FPIs data, the important thing to watch out is the inflow of FDIs which has remained unabated. “India is the highest receiver of FDIs since before the Covid-19 pandemic and that continued significantly during the pandemic and subsequently, too. It is that which indicates if the money which is coming in is staying invested in this country, thereby creating jobs and prospects for us, and not by indicating only the FIIs and FPIs,” she said.

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