DII: As soon as FPIs are bailed out, DIIs riding on retail fuels fund a bailout

Mumbai: Domestic Institutional Investors (dii) has invested ₹2.16 lakh crore in Indian equities so far in 2022 led by mutual funds and insurance companies, helping mitigate the impact of over ₹2 lakh crore outflows from foreign funds on the stock market Is. Free flow from retail investors Equity Mutual Fund Plans have been the main driver of domestic Pennies in stock market.

From October 2021, when the outflow FPI To begin with, DII has invested Rs 2.8 lakh crore in the shares here. FPIs have sold Indian shares worth ₹2.4 lakh crore since October 2021. then the benchmark Sensex And nifty Last hit record height.

Bail out as FPIs, DIIs aboard retail fuel funds a bailout

“Without DII support, the market (Nifty) would have been in four digits,” said Nilesh Shah, MD, Asset Management Company. Nifty closed at 15,413 on Wednesday. “So far this year, there has been an outflow of $36 billion from FPIs and their holdings have come down from 21.5% of the NSE 200 market cap to less than 19%.”
The Sensex and Nifty are down about 15-16% from their all-time highs in October. The midcap index has lost 20 per cent and the smallcap index has lost 22 per cent.

This has not stopped retail investors from investing money in the market. Domestic equity schemes have received an inflow of ₹ 1.39 lakh crore since the market started declining in October. Monthly inflows through systematic investment schemes (SIPs) were above ₹10,000 crore for the ninth consecutive month till May.

Fund managers said retail inflows so far have been strong due to higher returns from the past till October and lower returns from other asset classes such as fixed income and real estate. However, a rise in interest rates and pressure on equity returns could slow the flow, he added.

Vineet Sambre, Head of Equity, DSP Investment Managers said, “In the last eight-nine months, FPIs are withdrawing money and DIIs have compensated equally. Still there are doubts but redemptions are not happening.” “What we are watching closely is Nifty one-year returns which are over 2%. If bond yield crosses 8-8.5% then it will take some interest away from equities.”

The decline in appetite of retail investors is already visible. Net SIP account additions stood at 940,000 in May, lowest in 12 months

Shah said that “incompletely matured investors”, who look at past performance before investing, will get upset with the returns of the last one year. “They are a small percentage of the total investors and they can stop their SIPs. Smart investors will not lose money, they will top-up the SIPs,” Shah said.

He said that there will be a slowdown in the addition of new customers from the SIP side, but the money coming in the SIP is likely to be positive.

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