Realty, insurance sectors attract big FPI inflows in March 2021; here’s why
Amid record inflows from Foreign Portfolio Investors (FPI) into the Indian market in the financial year 2021 (FY21), real estate, insurance and oil & gas cornered the bulk of these funds in the last month of the financial year, according to a report from Edelweiss Securities.IT, pharmaceuticals and metals on the other hand witnessed net outflows in March 2021.FPIs binged on Indian stocks during the entire financial year 2021, putting a record Rs 2.74 lakh crore or $37 billion during the 12 months ended March 2021. This surpassed the previous record of Rs 1.4 lakh crore or $25.8 billion inflows recorded during FY13.As compared to previous months, these inflows slowed down in March 2021 at $1.43 billion owing to spiking bond yields in the US and the second wave of the pandemic. In the previous five months, average FPI investments in India were $5 billion making March.Out of this, real estate saw inflows of $497 million which amounted to 35% of all FPI inflows in March 2021. The second half of March saw maximum fund inflows in the realty sector, according to the report."In March 2021, FPIs parked in $497 million which equates to almost 35% of the total deployment. From April 2020 to March 2021, they pumped in $442 million and if we exclude March month’s flow then FPIs have taken out $55 million from the sector," Edelweiss report said.The NSE Realty index was down 4.5% in March 2021, the outliers within the sector were Oberoi Realty (up 5.5%) and Prestige (up 2.5%). The current sectoral weight of FPIs in real estate is 1.02%.After realty, the insurance sector gained the most garnering $496 million worth of investments during the month. According to Edelweiss, SBI Life may have been a beneficiary of these inflows as BNP Paribas Cardiff launched a mega share sale in which they exited almost 4.9% stake.Real estate stocks gained from the overall low-interest rate regime and Maharashtra slashing stamp duty. Investor sentiment also improved due to declining inventory in tier-1 cities.According to IIFL Alternative Research said FPI activity in March was led by block deal and third round of float implementation by FTSE.