[Podcast] Are Foreign Investors (FIIs) Less Important Now?[Podcast] Are Foreign Investors (FIIs) Less Important Now?

Ever wondered if the Indian stock market still needs Foreign Institutional Investors (FIIs) now that domestic investors are stepping up? Shray and Deepak chew over this hot topic in our latest episode.

They examine questions like whether foreign investors are responsible for recent market declines, who the primary owners of Indian companies are, and why foreign ownership is decreasing. They discuss the impact of regulatory changes, such as increased KYC requirements and the end of tax benefits for investments through Mauritius, Singapore, and Cyprus. The episode also delves into the differences between Foreign Portfolio Investors (FPIs) and Foreign Direct Investors (FDIs), as well as the significance of retail and domestic investors in the market. The hosts conclude by discussing the future of foreign ownership and whether retail investors should continue their systematic investment plans (SIPs).

With retail investment soaring, the influence of foreign money seems to be waning—or is it? They also discuss the consequences of significant foreign withdrawals during global crises and compare the patterns of FII with Foreign Direct Investment (FDI), highlighting the intricate details of market shifts. They also take a look at global capital flows through the case studies of Hyundai’s, Holcim and British American Tobacco among others. Tune in to understand why studying both FII and FDI activity is crucial for grasping the bigger picture of market behavior.

References

00:00 Introduction and Disclaimer
00:43 Overview of Foreign Investors in Indian Stock Market
01:33 Retail Investors vs. Foreign Investors
02:16 Impact of FII Withdrawals on the Market
03:20 Understanding FIIs and FDIs
04:50 Historical Context of Foreign Investments
07:48 FDI and FII Sales Trends
11:18 Promoter Ownership
15:55 The Role of KYC and Regulatory Changes
21:50 Promoter Strategies for Moving Money Abroad
30:19 The Use of Participatory Notes (P-Notes)
34:07 Cross-Border Taxation and Data Sharing
34:55 Unwinding of Promoter Stakes and Money Laundering
36:15 Taxation of Foreign Institutional Investors
36:49 Capital Gains Tax and Double Taxation Agreements
38:31 Mauritius and Other Tax Havens
40:52 Impact of Tax Renegotiations on FPIs
46:27 Pension Funds and Investment Strategies
54:52 Domestic Investment and Market Liquidity
01:00:32 Conclusion