What are Foreign Institutional Investors & their Impact on the Indian Stock Market?
Understand foreign institutional investors: Investment opportunities have gradually flooded our country since 1992, when India opened its markets to the global economy. Foreign investment had been increasing year after year prior to the 2008 housing market crisis.
It provided economic growth opportunities for India, which was still a developing country at the time. This meant improved education, job opportunities, and higher living standards for all Indian citizens.
Allowing foreign investment has led to our country becoming a global economic superpower, standing alongside some of the world's most developed nations. How did this happen? Foreign investments are the answer.
Welcome to FinGrad, and today we'll discuss Foreign Institutional Investors and their impact on the Indian stock market.
What exactly are Foreign Institutional Investors?
An FII is a financial institution that makes large investments outside of the country in which it is registered or incorporated.
Hedge funds, investment banks, mutual funds, and insurance companies are examples of FIIs. They are a significant source of foreign income for a developing economy like India because they provide capital that would otherwise be unavailable to retail investors. These firms see developing countries as prime opportunities because of their growing economies, economic potential, and asset liquidity.
What Is the Difference Between FII, FDI, and FPI?
An FDI is a long-term capital gain investment made by a company. This is an investment in a foreign country or company. This is accomplished by establishing a wholly owned subsidiary in the country or by forming a partnership with another domestic company. Their goal is to establish operations in another country and investigate business expansion opportunities. Read more on: Understand foreign institutional investors
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