Foreign institutional investors refer to companies from the foreign countries willing to invest their funds in the Indian market. These companies have to take permission from securities and exchange board of India. They can also work on the already existing security.
History of Foreign institutional investors in India
- India has been welcoming the foreign investors since 1992 and had been inviting portfolios since 1993.
- Near about 50% of the investment of the foreign investors is from offshore derivatives. They are ways to invest in the Indian market without registering with securities and exchange board of India.
- Over a period of time, Indian companies performances have improved accordingly FIIs confidence is build up which leads to FII with a value of $ 10 billion in 2010.
Who can get registered as FIIs?
Following foreign entities/funds are eligible to get registered as FII:
- Pension Funds
- Mutual Funds
- Investment Trusts
- Insurance Companies / Reinsurance Company
- Foreign Central Banks
- Foreign Governmental Agencies
- Sovereign Wealth Funds
- International/ Multilateral organization/ agency
- University Funds (Serving public interests)
- Endowments (Serving public interests)
- Foundations (Serving public interests)
- Charitable Trusts / Charitable Societies (Serving public interests)
Impact On Indian Economy
Foreign investments have developed at a very rapid rate and have both positive and negative impacts-