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:Prepared By:
Alfiya Vhora
Charu Agarwal
Dimple Chopra
Khusbu Patel
Shruti Jain
Yashi Singhal
 h er iew
4 What is FII and FDI
4 FII
s FDI
4 Why there is need of FII ?
4 Types of FII
4 Who can be registered as an FII?
4 The eligibility criteria for applicant
4 Major players of FII in Indian Stock market
4 Major cause of Market crash in 2008
4 Share of FII in NSE
4 FII in estment in 2009
4 Regulations of FII
4 Impact of FII on Indian market
 In estment in the Country from
Abroad

4 FDI : Foreign Direct In estment

4 FII : Foreign Institutional In estment

 FII
s FDI
4 Entry and Exit
4 Production and employment
4 Hot money
4 Primary & Secondary market
4 Short term
s Long term
4 In estors
4 Registration
Why there is need of FII ?
 Types of FII
4 Normal: In esting in equity and non equity in
the ratio of 70:30
4 Debt: in esting in 100% debt securities
Who can be registered as an FII?
 HhW Th APPLY
4 An application for registration has to be made in
Form A, the format of which is pro ided in the
SEBI(FII) Regulations, 1995 and submitted with
under mentioned documents in duplicate addressed
to SEBI as well as to Reser e Bank of India (RBI) and
sent to the following address within 10 to 12 days
of receipt of application.

Address for application

The Di ision Chief
FII Di ision
Securities and Exchange Board of India,
224, Mittal Court, 'B' Wing, 1st Floor,
Nariman Point, Mumbai - 400 021.
INDIA.
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The Eligibility criteria for Applicant

4 The applicant should ha e been in existence

for at least one year

4 Permission under the pro isions of the

Foreign Exchange Regulation Act

4 The applicant has to appoint a local custodian

 Eligible Securities
4 Securities in the primary and secondary
markets
4 Units of schemes floated by domestic mutual
funds
4 Deri ati es traded on a recognized stock
exchange
4 Go ernment Securities
Major Foreign Institutional In estors
In Indian Market

4 Citigroup
4 Deutsche Group
4 HSBC Global In estments
4 Morgan Stanley & Co. International Ltd.
4 Merrill Lynch Capital Markets Espana
FIIs as major cause of market crash
( Jan 21 to Jan 29 2008)
 Share of FII in NSE Listed Companies
         
  
Percentage Share of Foreign institutional
  Investors
Banks 18.41 19.15 17.1
Engineering 11.45 10.63 9.24
Finance 18.18 17.44 15.83
FMCG 11.91 14.07 13.46
Information Technology 14.53 16 16.3
Infrastructure 7.15 8.86 8.16
Manufacturing 9.57 9.46 8.51
Media & Entertainment 15.2 11.71 11.08
Petrochemicals 5.83 4.73 5.38
Pharmaceuticals 11.17 10.69 10.3
Services 13.09 10.7 10.89
Telecommunication 11.17 9.12 9.18
Miscellaneous 8.19 9.3 9.94
Total stake of FIIs 10.78 10.62 9.94
Source: www.nseindia.com
 Market Capitalization

   2006-07 

Market Capitalization Ratio 13.14% 15.08%

Market Capitalization of FII

holdings (Rs. Million) 5,421,606 7,121,181

GDP (Rs. Million) 41,257,250 47,234,000

Market Capitalisation of FIIs holding to Total

Market Capitalisation of NSE 16.10% 14.66%

Market Capitalisation- FII holding (Rs.million) 5,421,606 7,121,181

Market Capitalization- Total of NSE (in Rs.
Million) 33,673,500 48,581,217

Source: www.nseindia.com
 FII Regulations
4 Limit for FII in estments
4 Allowed to transact business
4 Equity shares can be borrowed by FIIs only
for the purpose of deli ery into short sale
4 No transactions on the stock exchange can be
carried forward
4 Transaction of business in securities
 FIIs In estment in 2009
4 FIIs ha e made net in estments of US$ 10
billion

4 FII has done in estment in different sectors

4 Infrastructure & Hea y Engineering attracted

FII
 Year 2009
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www.caclubindia.com
 Reason for FIIs to In est
4The late re i al of monsoon

4Upward re ision of economic growth from 5.8 % to

6.1%

4Better performance of companies in the 1st quarter

ended-June 30

4 Trade policy with an ambitious target of US$ 200

billion exports for 2010-11
 Impact of FII on Indian Market

4 They increased depth and breadth of the

market.
4 They played major role in expanding
securities business.
4 Their policy on focusing on fundamentals of
the shares had caused efficient pricing of
shares.
 Net In estments of FII from 2003-08

Year Net In estment

2003 30458.7

2004 38965.1

2005 47181.2

2006 36539.7

2007 71486.5

2008
-29169
(10
08
08)

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 FII͛s major Impact
4 Biggest fall of Indian Market in hct 2007

4 Almost 50%of the in estment are from the p-notes

.This has a negati e impact on stock market.

4 There is a direct relation between FIIs money flow

and the mo ement of sensex.