Domestic Investors Remained Buyers Amid Retail Sell-Off In Volatile Q4
Domestic institutions were also the only category which consistently bought Indian equities during each month of the final quarter of the fiscal.
Domestic Institutional Investors remained net buyers all through the fourth quarter of fiscal 2024. This, even as individual investors recorded net outflows from Indian equities during March, matching their stance with that of foreign portfolio investors, as broader markets turned volatile amid concerns of frothy valuations.
Indian equities saw net outflow of Rs 8,862 crore by retail investors during the month, while domestic institutions were the only category of investors who made net purchases at Rs 36,660 crore.
Nifty Smallcap 250 fell as much as 11.2% in March, led by churn in portfolio by stress test by funds, before rising by 7% from its lowest point. The sharp swing was observed as Finance Minister Nirmala Sitharaman commented on 'frothy' valuations, and the Securities and Exchange Board of India mandated a disclosure of stress test and liquidity analysis for mid and small-cap funds.
Quarterly View
Domestic institutions were also the only category which consistently bought Indian equities during each month of the final quarter of the fiscal.
Individual investors, who had remained on the sidelines with net outflows of Rs 5,000 crore in the first three quarters, bought a total of Rs 52,600 crore in the last quarter.
This strong inflow was higher than net inflows for the whole of the previous year, with January recording the highest ever monthly flows at Rs 36,000 crore.
Fiscal 2024 In Focus
Net flows by individual investor fell for the second consecutive year, with marginal decline of 4% to Rs 47,180 crore during the fiscal ended March 2024.
Domestic institutions mirrored a similar trend, with the pace of increase in net flows moderating to Rs 2.1 lakh crore against Rs 2.6 lakh crore.
During the fiscal, foreign portfolio investors reversed their stance to net inflows, adding $25.3 billion worth of Indian equities, as opposed to an outflow of $5.1 billion in FY23.
