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Foreign inflows to India shift toward block deals and IPO supply
Foreign portfolio investors deployed about ₹50,000 crore over the past two months, but much of it appears to be going into new and newly available shares rather than lifting broader secondary-market prices.
Foreign portfolio investors have returned to India with renewed buying, but LiveMint Markets reports the flow is increasingly concentrated in discounted block deals and new share sales instead of purchases from the open market. That pattern, the outlet says, can limit how much the influx lifts broader benchmarks as capital is absorbed by newly issued and newly available equity.
Over the last two months, India’s benchmark Sensex and Nifty rose modestly, gaining 0.6% and 0.9%, respectively. LiveMint Markets attributes the muted market response to returning foreign demand being channeled toward IPOs, qualified institutional placements, and secondary block trades, rather than driving price gains in existing stocks.
The outlet also points to elevated equity supply ahead of September, with promoter and institutional shareholders continuing to monetize holdings. It notes that large listings in the pipeline, including IPOs linked to the National Stock Exchange and Jio Platforms, could keep incremental FPI liquidity largely absorbed by issuance activity, leaving secondary indices range-bound.
In August, LiveMint Markets says IPOs, QIPs and secondary-market block trades together reached nearly ₹1.07 trillion, the highest monthly level so far this year. It adds that block deals led the increase, with their value rising 63% from July to nearly ₹80,000 crore, after lock-in periods expired for stakes sold by private equity and venture capital investors and promoters.
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