Quote on FII Outflows by Vaibhav Porwal, Co-Founder, Dezerv

2025-03-08 05:50:36 pm | Source: Dezerv

Quote on FII Outflows by Vaibhav Porwal, Co-Founder, Dezerv

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Below the Quote on FII Outflows by Vaibhav Porwal, Co-Founder, Dezerv

"The FII outflows signal all-around selling, with FIIs consistently offloading significant amounts over the past six months. This could be driven by multiple factors such as -

1. India is undergoing a market correction, with all major equity indices falling by approximately 11%–25%. US bonds currently offer attractive yields without the volatility or currency risk associated with emerging market equities. In addition, US interest rates have risen.

2. Additionally, the 3% rupee depreciation has eroded returns for FIIs. Moreover, India levies taxes of 12.5% on long-term and 20% on short-term capital gains for FIIs, whereas alternative markets offer zero or lower tax environments.

These factors may have incentivized FIIs to allocate funds where they find valuation comfort and prompted them to reallocate investments to markets offering potentially better returns, such as China, the US, Brazil, or Thailand."

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Quote on FII Outflows by Vaibhav Porwal, Co-Founder, Dezerv

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