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Entity called FII.............

Well, i have taken the reference from ET... FIIs are the key players in current stock markets..

Why they are so spl... lets have a look

  1. Foreign Institutional investors (FIIs) are entities established or incorporated outside India and make proposals for investments in India.
  2. These investment proposals by the FIIs are made on behalf of sub accounts, which may include foreign corporates, individuals , funds etc.
  3. In order to act as a banker to the FIIs, the RBI has designated banks that are authorised to deal with them.
  4. The biggest source through which FIIs invest is the issuance of Participatory Notes (P-Notes ), which are also known as Offshore Derivatives.

Can they invest in India?

  1. they can invest in the stocks and debentures of the Indian companies.
  2. In order to invest in the primary and secondary capital markets in India, they have to venture through the portfolio investment scheme (PIS).

According to RBI regulations, the ceiling for overall investment for FIIs is 24% of the paid up capital of the Indian company. The limit is 20% of the paid up capital in the case of public sector banks.

SEBI has allowed FIIs to invest in unlisted exchanges as well, which means both BSE and NSE (the unlisted bourses) can now allot shares to FIIs also.


Why are FIIs important for Indian mkts?

  1. FIIs are among the major sources of liquidity for the Indian markets.
  2. If FIIs are investing huge amounts in the Indian stock exchanges then it reflects their high confidence and a healthy investor sentiment for our markets.
  3. But with the current global financial turmoil and a liquidity and credit freeze in the international markets, FIIs have become net sellers (on a day to day basis).
  4. The entry of FIIs in India has brought mixed consequences for our markets, on one hand they have improved the breadth and depth of Indian markets and on the other hand they have also become the major sources of speculation in testing times like these.

Comments

Unknown said…
why dere is suspense in this comment....of coming soon.....
Ankit Gupta said…
Hi Swati... no suspense... just creatin the post..!!!
Rajat said…
waiting for the past....:)
M_U_K_U_N{U_V} said…
okay sir ab pata chala isk concept ki clearity... Thanx sir

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