According to JM financial report, net inflows into equity mutual fund schemes were down 23% on a month-on-month basis in December 2018 at Rs 6,700 crore. "Unlike November 2018 when liquid mutual fund schemes witnessed strong inflows, liquid mutual fund schemes saw large outflows of Rs 1.5 trillion (Rs 1.5 lakh crore) in December 2018, while debt mutual fund schemes witnessed outflows worth Rs 3,400 crore in December 2018," the report said. However, inflows through the Systematic Investment Plan (SIP) were strong in December at Rs 8,020 crore.
Rise in global crude prices, depreciating rupee and rise in US interest rates prompted foreign portfolio investors (FPIs) to withdraw Rs 83,146 crore from Indian capital markets in 2018. FPIs withdrew Rs 33,553 crore from equities and Rs 49,593 crore from the debt market. FPIs had infused net inflows of Rs 2 lakh crore in 2017. According to analysts, fund flows from FPIs are expected to be volatile in 2019 due to uncertainty over outcome of general elections in May and signs of economic recovery. FPIs were net buyers of Indian equities for six consecutive years from 2012 to 2017.
An investor can opt for a lumpsum investment or Systematic Investment plan (SIP) in equities and equity MFs. SIPs capture the wide fluctuations in the equities which do not grow in a linear way. SIPs average out the cost of investment and accumulate more units over longer periods. This concept is called rupee-cost averaging. Unlike equities, in case of debt funds or any other fixed income instrument, lumpsum investment is preferable to a staggered one (FD v/s Recurring deposit) since the return rises in a linear way. Higher the investment at the lower point, higher will be the return.
John Chambers is the CEO of JC2 Ventures, which has invested in 16 startups around the world. In his opinion 60%-70% of all start ups look for selling themselves to a venture capital/ private equity and cash out early. According to him, the biggest challenge for a startup is scaling up. He appreciates efforts from indian government which are focused on fostering startups and entrepreneurship. He also acknolwedged that private equity/venture capital firms are simply enablers of growth providing funding and management expertise.
For the first time in 7 years, Indian stock market overtook its German peer to become the 7th largest in the world, according to data compiled by Boolmberg. Post Brexit in March, the only country to represent EU in the seven biggest global markets will be France. The growth in Indian equities is primarily backed by increasing reliance on domestic demand which has guarded the Indian companies from the meltdown in other emerging markets spurred by Federal Reserve tightening and a trade war between the U.S. and China.
During the period December 3-21, Foreign portfolio investors (FPIs) infused a net amount of Rs 3,884 crore (Rs 1,332 crore in equities and Rs 2,552 crore in the debt markets). The infusion has been attributed to falling crude oil prices and appreciating rupee against dollar. However, till December 7, FPIs were net sellers in the equity market, pulling out Rs 383 crore, but turned net buyers with Rs 2,744 crore infusion in the debt markets during the period under review. FPIs had invested over Rs 12,266 crore net in debt and equity instruments in November, the highest in 10 months.
As per the data compiled by data analytics firm Prime Database, Indian companies have so far raised Rs 5.90 lakh crore in 2018 from equity and debt instruments as compared to Rs 8.60 lakh crore in 2017. Debt instruments remain the most preferred route for raising funds by corporates, accounting for as much as Rs 5.1 lakh crore while the remaining 78,500 crore have come from equities, mostly through IPOs and share allotment to institutional investors. The funds have been raised mainly for business expansion plans, loan repayments and to support working capital.