FPIs go big on realty, insurance in March | Economic Times

Mumbai: Real estate and insurance stocks absorbed the bulk of the foreign fund inflows in March. While flows have tapered to $1.43 billion during the month compared to an average net inflow of $5 billion in the previous five months due to the fresh uncertainties over rising US bond yields and increase in Covid-19 cases, this is the first time in many years these investors have focused on the real estate sector.Data from Edelweiss Alternative Research showed that foreign portfolio investors (FPIs) parked $497 million in the real estate sector in March, which is equal to almost 35% of their total deployment in March. More than 90% of inflows in the realty sector were received in the second half of March. The NSE Realty index fell 4.5% in March as against the 1.1% gains in the Nifty50.Investor sentiment for the sector has improved due to the declining inventory in tier-1 cities, strong pre-sales commentary of listed realty companies and the initial public offering of Macrotech Developers, which is among the largest realty companies in the country.While real estate stocks have been outperformers in the past year, their valuations are still way below that of the broader market because of their underperformance since 2008. The Nifty Realty index gained 79% in FY21, outperforming the 67% gain in the benchmark Nifty50. Based on the book value, the Nifty trades at a 54% premium to the Nifty Realty index.FPIs deployed $496 million in the insurance sector with a chunk of the money flowing to SBI Life as BNP Paribas launched their share sale to sell almost 4.9% in the company.81976283IIFL Alternative Research said FPI buying activity in March was led by block deal participation and third round of float implementation by FTSE.The firm said IT, pharma, metals and financials saw outflows during March, while the cement and construction sectors saw six straight months of foreign inflows.The brokerage said part of the inflows into the oil and gas sector can be attributed to the inclusion of Reliance Partly Paid-up Shares in the FTSE India index.FPIs pulled $121 million out from the banking sector during the month. The stocks in the sector received overseas inflows of $10.5 billion during FY21. FPIs’ sectoral weight in banking dropped to 33.4% from 34.8% in February following the outflows, according to Edelweiss.