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Explained: Why FPIs are buying via IPO route and selling in stock market


Published on 2024-12-02 05:31:10 - Thomas Matters, WOPRAI
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  • FPIs have invested
  • 1.03 lakh crore in the Indian primary market through IPOs and QIBs, while they pumped out
  • 1.18 lakh crore through the secondary market.

The article from Fortune India discusses the intriguing behavior of Foreign Portfolio Investors (FPIs) who are simultaneously selling shares in the secondary market while investing heavily through the IPO route in India. This trend has been particularly noticeable in 2024, where FPIs have sold stocks worth Rs 28,818 crore in the cash market but have also invested Rs 26,000 crore in new IPOs. This dual strategy is driven by several factors: firstly, the high valuations in the Indian market make it less attractive for FPIs to buy existing stocks, leading them to book profits. Secondly, the promise of high returns from new IPOs, especially in sectors like manufacturing, renewable energy, and technology, which are seen as growth areas, attracts FPIs. Additionally, the article notes that while FPIs are cautious about the high valuations and potential market corrections, the allure of participating in India's growth story through new listings remains strong. This behavior reflects a nuanced approach to investment where FPIs are balancing risk and reward by exiting overvalued stocks and entering potentially undervalued new market entrants.

Read the Full Fortune India Article at:
[ https://www.fortuneindia.com/investing/explained-why-fpis-are-buying-via-ipo-route-and-selling-in-stock-market/119371 ]

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