Foreign portfolio investors (FPIs) continue to withdraw investments from Indian stocks in the face of the intense COVID-19 problem and state-level lockdowns.

According to NSDL statistics, FPIs have removed a net investment of Rs6,427 crore from the stocks category so far in May.

The gloomy investment mood stems from the country's worsening Covid dilemma. Analysts believe that the state-by-state lockdowns and limitations have harmed the prospects for economic restoration.

Continuing a net investment withdrawal of Rs9.659 crore by FPIs in April, the selling in May has continued. The bearish pattern last month occurred after six months of nonstop purchasing.

The total net investment in 2020 is now Rs39,656 crore.

Foreign Portfolio Investors (FPIs) ceased their purchasing binge in April, withdrawing net investments worth Rs9.659 crore from Indian shares. The trend reverse occurred at a time when the increasing number of Covid cases and the accompanying lockdowns frightened investors. After a five-month hiatus, Foreign Portfolio Investors became net sellers in March.

FPIs made net investments of Rs7,783 crore in September. Analysts believe that, in addition to the second wave of Covid-19, the devaluation of the Indian rupee resulted in an outflow of foreign money last month. The net Foreign Portfolio Investor investment in 2020 is presently Rs46,083 crore, which comprises net investments of Rs19,473 crore, Rs25,787 crore, and Rs10,482 crore in January, February, and March. The FPI system, which is governed by SEBI, is a channel for foreign investment in India.

The FPI framework emerged as a unified path for foreign investment in India, combining the two previous modalities of investment, namely Foreign Institutional Investor (FII) and Qualified Foreign Investor (QFI) (QFI). Three nations - the United States, Mauritius, and Luxembourg – contributed more than half of India's total foreign portfolio investment (FPI). As per the statistics from the National Securities Depository Ltd, US investors contributed Rs15.38 lakh crore, Mauritius contributed Rs5.29 lakh crore, and Luxembourg contributed Rs3.74 lakh crore to the total investment of Rs44.62 lakh crore (NSDL).