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INTRODUCTION

FOREIGN PORTFOLIO INVESTMENT (FPI) CONSISTS OF SECURITIES AND FINANCIAL ASSETS HELD BY THE INVESTORS IN ANOTHER COUNTRY. IT DOES NOT PROVIDE THE INVESTOR WITH THE DIRECT OWNERSHIP OF A COMPANY’S ASSETS
FOREIGN PORTFOLIO INVESTMENT, THESE SECURITIES CAN INCLUDE STOCKS, GLOBAL DEPOSITORY RECEIPTS (GDRS),BONDS ISSUED BY THESE COMPANIES OR FOREIGN GOVERNMENTS, MUTUAL FUND,ETC.
IN 1992, INDIA OPENED UP ITS ECONOMY AND ALLOWED FOREIGN PORTFOLIO INVESTMENT (FPI) IN ITS DOMESTIC STOCK MARKETS.
SINCE THEN, FPI HAS EMERGED AS A MAJOR SOURCE OF PRIVATE CAPITAL INFLOW IN THE COUNTRY.

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FOR THE PERIOD OF 1992 TO 2005, MORE THAN 50 PERCENT OF FOREIGN INVESTMENT IN INDIA CAME IN THE FORM OF FPI.

FOREIGN PORTFOLIO INVESTMENT REACHED AN ALL TIME HIGH OF 21.703 BN USD IN DECEMBER 2022.

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HERE WE ALSO STUDIED TWO SECTORS FOR FPI THAT ARE AS FOLLOW

AUTOMOBILE & AUTO COMPONENTS
FINANCIAL SERVICES

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AUTOMOBILE & AUTO COMPONENTS

THE AUTOMOBILE INDUSTRY IN INDIA IS THE FOURTH LARGEST IN THE WORLD AS PER THE STATISTICS OF 2021.
CURRENTLY INDIA’S AUTO SECTOR IS WORTH OF MORE THAN US$100 BILLION AND CONTRIBUTES 8% OF THE COUNTRY’S TOTAL EXPORT AND ACCOUNTS FOR 2.3% OF INDIA’S GDP.
IN SEPT 2021, TO BOOST THE AUTOMOTIVE INDUSTRY WITH THE NEWER AND GREEN TECHNOLOGY THE GOI LAUNCHED 3 PLI SCHEMES.

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SCHEME 1:RS 26000 CR SCHEME FOR PRODUCTION OF ELECTRIC VEHICLES AND HYDROGEN FUEL VEHICLES

SCHEME2:-RS 18,000 CR “ADVANCED CHEMISTRY CELL” SCHEME FOR NEW GENERATION ADVANCE STORAGE TECHNOLOGIES WHICH ARE USEFUL FOR THE ELECTRIC V EHICLES.

SCHEME3:-FASTER ADAPTION OF MANUFACTURING OF ELECTRIC VEHICLES”.

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FINANCIAL SERVICES

FINANCIAL SECTOR COMPRISES COMMERCIAL BANKS, INSURANCE COMPANIES, NONBANKING FINANCIAL COMPANIES, COOPERATIVES, PENSION FUNDS, MUTUAL FUNDS AND OTHER SMALLER FINANCIAL ENTITIES
HOWEVER, THE FINANCIAL SECTOR IN INDIA IS PREDOMINANTLY A BANKING SECTOR WITH COMMERCIAL BANK ACCOUNTING FOR MORE THAN 64% OF THE TOTAL ASSETS HELD BY THE FINANCIAL SYSTEM .
INDIA IS EXPECTED TO HAVE 6.11 LAKH HNWIS BY 2025. THIS WILL INDEED LEA D INDIA TO BE THE 4^TH LARGEST PRIVATE WEALTH MARKET GLOBALLY BY 2028

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INDIA’S INSURANCE MARKET IS ALSO EXPECTED TO REACH U.S. $250 BILLION BY 2025
THIS WILL FURTHER OFFER INDIA AN OPPORTUNITY OF U.S. $78 BILLIONS OF ADDITIONAL LIFE INSURANCE PREMIUMS FROM 2020 - 30.

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WHY ARE WE WORKING ON THIS?

FPI HAS POSITIVE IMPACT ON ECONOMIC GROWTH OF INDIA. BY THE STUDY WE GET TO KNOW ABOUT THE FOREIGN INVESTMENT IN THE ASSETS OF COUNTRY FROM 2011-2021

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IMPORTANCE & OBJECTIVE OF STUDY

THE STUDY WORKS OUT THE TRENDS AND PATTERNS, MAIN DETERMINANTS AND INVESTMENT FLOWS TO INDIA. THE STUDY ALSO EXAMINES THE ROLE OF FPI ON ECONOMIC GROWTH IN INDIA FOR THE PERIOD
REMOVAL OF RESTRICTIONS, BILATERAL AND REGIONAL INVESTMENT AGREEMENTS AMONG THE DIFFERENT COUNTRIES DEVELOPS NEW ECONOMIES IN THE WORLD OF INDUSTRIALIZ ED NATIONS.
TO ANALYZE THE TRENDS, GROWTH AND PATTERNS OF FPI
TO ANALYZE THE EQUITY FLOW
FIND OUT THE SECTORAL INVESTMENT OPPORTUNITY IN FPI

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DATA ANALYSIS

THE DATA COLLECTED FOR ANALYSIS IS SECONDARY DATA COLLECTED FROM GOVERNMENT WEBSITES
THE MAJORITY OF DATA IS TAKEN FROM SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI), RESERVE BANK OF INDIA (RBI) AND NATIONAL STOCK EXCHANGE (NSE).
THE TIME PERIOD OF THE DATA FROM 2012 TO 2022
IN FIRST SECTION OF OUR ANALYSIS, WE HAVE ANALYZED INFLOW OF TOTAL FPI AND CHANGE IN FPI FLOW.
IN SECOND SECTION OF OUR ANALYSIS, WE HAVE DONE A FOCUS STUDY ON EQUITY INFLOW AND TWO SECTORS.
IN THIRD SECTION, WE HAVE DONE DESCRIPTIVE ANALYSIS OF BOTH THE SECTORS USING DIFFERENT STATISTICAL TOOLS.

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FPI FLOW IN AUTOMOBILE & AUTO COMPONENTS AND FINANCIAL SERVICE

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AUTO MOBILE & AUTO COMPONENTS

AUC INCREASED 4TIMES FROM 2012-22

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FINANCIAL SERVICES

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DESCRIPTIVE ANALYSIS FOR AUTO MOBILE

MAXIMUM - 2,11,381

MINIMUM -50,510

MEAN -1,26,586

MEDIAN - 1,15,508

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DESCRIPTIVE ANALYSIS FOR FINANCIAL SERVICES

MAXIMUM – 13,95,637
MINIMUM –3,08,713
MEAN - 7,49,107
MEDIAN - 5,85,755

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CORELATION OF X AND Y = 0.797137�COVARIANCE OF X AND Y = 1. 506130

STANDARD DEVIATION OF X = 53190.20004

STANDARD DEVIATION OF Y = 387937.6

VARIANCE OF X = 2829197380

VARIANCE OF Y =1.50496E11

VARIANCE OF X AND Y = 1.73546E11

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CONCLUSION & FUTURE PROSPECTS

THE TOTAL FPI (AUC) INFLOW IN THESE FINANCIAL YEARS HAS INCREASED AND WE HAVE NOTICED A HUGE GAP BETWEEN THE FPI INFLOWS OF THE YEAR 2022 AND 2012
WE HAVE CONCLUDED THAT FPI PLAYS A SIGNIFICANT ROLE IN THE ECONOMIC GROWTH OF OUR COUNTRY INDIA.
WE HAVE ALSO DONE A STUDY ON FUTURE PROSPECT OF BOTH THE SECTORS AND FOUND THAT BOTH SECTORS HAVE THE POTENTIAL TO CONTRIBUTE IN DEVELOPMENT OF OUR COUNTRY.
IT IS WORKING TO CREATE AN INTEGRATED ELECTRIC VEHICLE MOBILITY ECOSYSTEM WITH A LOW CARBON FOOTPRINT AND HIGH PASSENGER DENSITY WITH AN EMPHASIS ON URBAN TRANSPORTATION
THE ASSOCIATION OF MUTUAL FUNDS IN INDIA IS TARGETING A NEARLY FIVEFOLD GROWTH IN AUM ₹2.95 LA KH CRORE AND MORE THAN THREE TIMES GROWTH IN INVESTOR AND TO 130 MILLION BY 2025
INDIA’S FINTECH SPACE IS EXPECTED TO FURTHER FUEL THIS GROWTH IN VARIOUS SEGMENTS.
INDIA’S MOBILE WALLET INDUSTRY IS ESTIMATED TO GROW AT A COMPOUND ANNUAL GROWTH RATE OF 150 % TO REACH U.S. DOLLAR 4.4 BILLION BY 2022.

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REFERENCE

1:- HTTPS://WWW.SEBI.GOV.IN

2:-HTTPS://WWW.FPI.NSDL.CO.IN

3:-HTTPS://WWW.IBEF.ORG/INDUSTRY/INDIAAUTOMOBIES

4:- BANK OF BARODA’S REPORT TRENDS IN FPI FLOWS IN INDIA

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