DII inflows in stock markets cross ₹1 trillion mark

Mumbai: Domestic institutional investors (DIIs) invested ₹ 23,545.94 crore in Indian stock markets in October, taking advantage of the correction in the market. Their total investments this year have crossed ₹ 1 trillion so far. DIIs’ net investment in Indian equity market so far this year stands at ₹ 1.06 trillion. Mutual funds have pumped in a net of ₹ 1.04 trillion, implying that some DIIs may have been net sellers of the asset class.

Queries emailed to state-run Life Insurance Corporation of India (LIC), one of the biggest DIIs, on whether it was a net buyer and the quantum, remained unanswered.

In October so far, mutual funds have invested ₹ 16,089.12 crore in equities. It seems mutual funds have tried to take advantage of the correction. The BSE’s 30-share Sensex has declined 5.96% in October.

“Apart from regular flows, mutual funds may have deployed additional cash at lower levels,” said Navneet Munot, CIO of SBI Funds Management Ltd.

“SIP continues to grow, and there were NFOs (over the past few months). There is not much momentum in lump sum investments,” said Anand Shah, deputy chief executive officer and head of investments, BNP Paribas Asset Management India Pvt. Ltd. “Cash deployment from earlier months may have also happened.”

Shah said the industry has seen significantly good inflows in the last 24-36 months, and it could be difficult to sustain that kind of momentum as we head into an election year. “Investors will be in wait and watch mode, and watch the market closely. Regulatory changes in terms of cut-down of TER (total expense ratio) will also impact. That said, overall, investor awareness is increasing, and new additions will continue over the next few years.”

Private insurers have been buying into the recent correction as well.

“Private insurance companies, including us, have largely been net buyers of equities in the market correction this month,” said Sampath Reddy, chief investment officer, Bajaj Allianz Life Insurance Co. Ltd.

“As it happens in most cycles, whenever markets correct the way they have corrected this time, we do look at opportunities to invest, and we have been buyers into this correction,” said Manish Kumar, CIO, ICICI Prudential Life Insurance Co Ltd.