FPI (Foreign Portfolio Investor)

FPI (Foreign Portfolio Investor) is a non-resident investor — foreign institutional asset managers, sovereign wealth funds, pension funds, university endowments — registered with SEBI to invest in Indian listed securities (equities, debt, ETFs, REITs, InvITs).

Categories (SEBI FPI Regulations 2019):

• Category I — lowest risk: government-related entities, sovereign wealth funds, central banks, regulated public retail funds, multilateral agencies.
• Category II — higher risk: hedge funds, individuals, family offices, corporate bodies, charitable trusts not in Cat I.

INR example: FPI net flows are reported daily by NSDL/CDSL and tracked on the NSE FPI dashboard. A ₹5,000 cr FPI sell day in equity often triggers a 1–2% Nifty drop. CY2024 net FPI inflow into Indian equities was ~₹1.27 lakh cr; debt saw record ~₹1.20 lakh cr inflows post-JP Morgan EM bond index inclusion.

When to use: FPI flow data is a leading indicator of short-term market sentiment. Pair FPI flows with DII flows — net of the two is often the real market-moving number. Single-day FPI extremes (> ₹7,500 cr either way) usually flag short-term inflection points.

SEBI note: SEBI registers FPIs via Designated Depository Participants (DDPs) under SEBI (FPI) Regulations 2019. Aggregate FPI ownership in a single Indian company is capped at 24% (sectoral caps may apply); the company can raise it to the sectoral cap with a special resolution.

Related terms: NRI, DTAA, Free Float.