FII’s & DII’s

Foreign Institutional Investors

Domestic Institutional Investors

DESIGNED BY JIGAR (SK19) & Vinay(SK58)

 Meaning:
Institutional investors are entities that pool money from multiple
investors and invest it in various financial assets. There are two
types of institutional investors
 FII’s:
A foreign institutional investor (FII) is an investor or investment
fund investing in a country outside of the one in which it is
registered or headquartered.
 Some Of The Big
Black FII’s
Vanguard B.
1
Rock 2 3
Hathaway

Investment Investment Investment

10 Trillion 8 Trillion 500 Billion
Dollars Dollars Dollars
 Merits of
FII’s:
• FIIs will increase capital inflows into the country.

• They also contribute to economic development by making long-

term capital available for projects.

• FII focuses on equity rather than debt which helps in

maintaining and improving the capital of the company they are
investing in.
 Demerits of
FII’s:
• The demand for the local currency (rupee) increases. This can
cause severe inflation in the economy.
• These FII’s drive the fortune of big companies in which they
invest. But their buying and selling of securities have a huge
impact on the stock market. The smaller companies are taken
along for the ride.
• Sometimes these FII’s seek only short-term returns. When they
pull their investments banks can face a shortage of funds.
 Final Word:
FII helps in improving the economy by opening new
opportunities. They are a vital force in today’s global financial
markets. These investors bring much-needed liquidity and
diversification to markets around the world, helping to drive
economic growth and development. Hence, FIIs are a powerful
and creative force for change in the world of finance
 DII’s:
 Domestic institutional investors are those institutional investors
which undertake investment in securities and other financial
assets of the country they are based in.
 Some Of The Big
LIC
DII’s
UTI Other
Mutual
Funds
Investment Investment Investment
42 Lakh 22 Lakh 12 Lakh +
Crore Crore Crore
 Merits of
DII’s:
1.DII provides a way for private investors to invest in essential infrastructure projects that would
otherwise be funded solely by government entities. By attracting private capital, DII can help
reduce the burden on government budgets and ensure that critical infrastructure projects get the
funding they need.

2. Private investors may bring new ideas and innovative approaches to infrastructure projects,
which can lead to increased efficiency in the design, construction, and operation of these
facilities. Additionally, the private sector may have more experience in managing risk and
mitigating project uncertainties, leading to better project outcomes.

3.Infrastructure projects can create significant employment opportunities in both the short and
long term. By attracting private investment, DII can help accelerate the completion of
infrastructure projects, leading to more job creation.
 Demerits of
DII’s:
1.Profit Motivation: Private investors are primarily driven by profit, which can lead to a
focus on short-term gains over long-term sustainability. This can result in
underinvestment in essential but less profitable infrastructure projects, such as rural
roads and public transportation.
2.Social Equity: Private investors may not prioritize social equity and public access to
essential infrastructure, leading to unequal access to critical services. For example,
private toll roads can create a barrier to access for low-income residents who cannot
afford the fees.
3.Regulatory and Legal Challenges: DII can face complex regulatory and legal
challenges, particularly when it comes to issues like land acquisition, environmental
compliance, and permits. These challenges can increase project costs and timelines.
 Final Word:
DII (Direct Investment into Infrastructure) is a way for private
investors to fund essential infrastructure projects like highways,
airports, and power plants. DII can attract private capital, enhance
efficiency, create jobs, promote economic growth, and offer
stable returns on investment.
 Presented By:
01 02

JIGAR.G.L VINAY.V.J
SK-19 SK-58