and whoever wants to be first must be slave of all. For even the Son of Man did not come to be served, but to serve, and to give his life as a ransom for many.”

22 Feb 2017


Many more Indians flock to MFs. This is an important reason why the Indian stock market did not crash as much as was anticipated with the strong outflow of foreign money in 2016.

The past three years have been phenomenal for the mutual fund (MF) sector. The equity segment, in particular, has seen almost unprecedented growth. Assets under management are now more than the Rs 5 lakh crore-mark; since the start of 2014, a little over 10 million accounts have been added in the equity category. After slipping to 29 million after the Lehman crisis, the investor base has steadily been rising over the past three years to 39.6 mn as of end-January 2017. 

Since May 2014, when the Narendra Modi government took charge, monthly net inflow in equity schemes have never turned negative, except on one occasion, in March 2016. That was mainly due to unexpectedly higher redemption by investors, though gross sales remained healthy, meaning fresh money continued to come in. Total net inflow (net of outflow) during this period has been a whopping Rs 2 lakh crore — over Rs 5,000 crore in average monthly inflow. 

Noteworthy is the burgeoning size of Systematic Investment Plans (SIPs). Last month, flow through SIPs crossed Rs 4,000 crore, huge on an annual basis.

Experts say the flow surge in equity schemes is an important reason why the Indian stock market did not crash as much as was anticipated with the strong outflow of foreign money in 2016. Individual investors are becoming more and more aware about MF investments. With continuous investor awareness programmes and usage of digital methods aiding investment, the results have been positive. With the poor penetration of MF products, sector officials see huge potential — hardly 15 million individual investors in MFs, in a country with 1,300 million people.

2,500 new FPIs register with Sebi in Apr-Dec

More than 2,500 new foreign portfolio investors (FPIs) registered with Sebi in April- December period of the current fiscal on several measures taken by the capital markets watchdog.

About 2,900 FPIs had received approval from Sebi last financial year.

The number of FPIs with Sebi's approval rose to 6,833 at the end of December from 4,311 at March-end, reflecting an addition of 2,522 such investors, according to the latest data from the Securities and Exchange Board of India (Sebi).

FPIs consider India as a preferred and stable market, given its macro-economic stability, long-term growth prospects and ongoing economic and social reforms, market experts said.

Besides, Sebi last month notified new norms to offer direct entry to well-regulated foreign investors for investing in corporate bonds, they added.

Further, Finance Minister Arun Jaitley in his Budget speech had proposed that Category I and II FPIs should be exempted from taxation on indirect transfers.

In a big revamp, Sebi had in 2014 released norms that clubbed different categories of foreign investors into a new class called FPIs.

FPIs 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 for them.

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 FPI.

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