SEBI raises FPI disclosure limit to attract smaller investors

The Securities and Exchange Board of India (SEBI) has raised the threshold limit for Foreign Portfolio Investors (FPIs) to disclose their investments. The limit increased from 25,000 crores to 50,000 crores, a change that could bring in smaller foreign investors and improve India’s image in international markets. Market expert Sunil Subramaniam believes this adjustment is significant. He says that by increasing the threshold, SEBI allows for more privacy in investment strategies. Smaller funds can now avoid revealing their positions, which often leads to a competitive advantage. When large investors buy shares, others tend to follow, which can drive up prices and reduce the original investor's potential gains. Subramaniam explains that SEBI's move is not only beneficial for investors but also reduces the administrative burden on the regulatory body. With fewer disclosures to track, SEBI can streamline its processes. This change is seen as a positive signal from SEBI, showing a willingness to engage and make the investment environment more attractive for foreign funds. While the change may not lead to immediate investment spikes, Subramaniam suggests it could open doors for a broader range of smaller FPIs. This diversification would lessen reliance on a few large sovereign wealth funds and could enhance investment flows into India. He notes that, alongside this threshold change, other factors such as clearer trade policies and upcoming earnings reports may trigger increased foreign investment in the near future. Overall, he sees this as a strategic move towards attracting more investors to the Indian market.