Rs 83,000 crore in 3 months! DII faith in Dalal Street unaffected by global volatility

Despite record outflows from foreign institutional investors, India was the best-performing emerging market in 2022, primarily due to record inflows from domestic institutional investors.

The volatility in global markets notwithstanding, DIIs have been relentlessly buying equities, and in the first three months of 2023, they have pumped in Rs 832 billion, data shared by NSE showed. This is almost equal to the total inflows seen in 2021.

DIIs net invested Rs 876 billion in 2021, which surged to a record Rs 2.7 lakh crore in 2022.

What’s interesting is that of the net inflows of Rs 832 billion, Rs 305 billion alone came in the month of March.

In FY23, DIIs net invested Rs 2.6 lakh crore into equities compared with Rs 2.1 lakh crore in FY22.



The strong buying by DIIs has been supported primarily by the retail inflows into the mutual fund industry through the systematic investment plan (SIP) route.

Investments through the SIP route hit a record high of Rs 14,276 crore in March.

The benchmark Nifty50 index corrected more than 10% from its peak in December 2022,

which led to value buying emerging at lower levels. While midcap and smallcap stocks underperformed the largecaps, they have gained momentum as the overall markets have stabilised.

“Increasing inflows since the beginning of the year, with this month (March) being the highest contribution in the past 10 months reflects investors’ confidence in the growth of the Indian economy,” said Jean Christophe, director and chief marketing officer, Sharekhan by BNP Paribas.

With improving macroeconomic conditions, easing inflation, and expectations of growth in corporate profits, market insiders see inflows from retail investors sustaining.

“We see a very positive trend in SIP flows. By the year end, we believe that the SIP flows should be at least at around Rs 15,000 crore,” said N S Venkatesh, CEO, Association of Mutual Funds in India.

While the domestic story remains promising, global nuisances persist and this could keep bringing bouts of volatility in the equity market.

“2023 is going to be a year of accumulation as volatility is likely to be higher with correction during the course of the year. Investors should focus on regular incremental buying on every minor dips from here on,” says Sachin Jain of ICICI Securities. For investors with an investment horizon of more than 1 year, the equity market is providing a decent investment opportunity, while for near-term investment horizon, “buy on dips” should be the strategy, Jain said.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)