More than 860 fresh overseas investors were registered with Sebi in the first five months of 2017-18, driven by their continued interest in the Indian capital markets, latest data from the regulator showed. This comes on top of close to 3,500 new foreign portfolio investors (FPIs) registering with Sebi in the past financial year.According to Sebi data, the number of FPIs with the regulator’s approval rose to 8,669 at the end of August 2017, from 7,807 at March-end, an addition of 862. “The reason for increasing FPIs registrations is continued interest in the Indian equity, bonds and real estate. Besides, the end of the earlier FII/sub-accounts regime, which ended in September 2016, necessitated all such entries to register as FPI,” said Arvind Chari, head, fixed income and alternatives, Quantum Advisors.
Furthermore, experts believe that several measures taken by the Sebi added to India’s attractiveness. Also, foreign investors have pumped in more than Rs 1.8 lakh crore into the Indian capital markets — equity and debt — during the period under review. This included Rs 1.44 lakh crore in debt, with the remaining in equities.
In June, the board of Securities and Exchange Board of India (Sebi) decided to ease the entry norms for overseas investors by permitting direct access to FPIs from eligible jurisdictions. Recently, Sebi raised FPIs’ investment limit for government debt, permitted them to invest in unlisted corporate debt as well as securitised debt instruments and allowed direct entry to well-regulated foreign investors to invest in corporate bonds.
In a big revamp, Sebi in 2014 released norms that clubbed different categories of foreign investors into a new class called FPIs. They have been divided into three categories as per their risk profile and KYC (know your customer) requirements while other registration procedures have been made simpler. They are granted permanent registration as against the earlier practice of approval granted for one or five years to overseas entities seeking to invest in Indian markets. The registration remains permanent unless suspended or cancelled by Sebi or surrendered by an FPI.