India's exceptional growth story and its booming economy have made the country a favourite destination with foreign institutional investors (FIIs).

FIIs showed huge interest in 2007, pumping in the highest ever net investment of US$ 17.23 billion in the equity markets and were instrumental in the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) clocking record index levels of over 20,000 and 6,000, respectively. In fact, during the year, FIIs were net buyers in 10 out of 12 months, turning net sellers in the rest, primarily to make up the losses on account of the sub-prime crisis in the US.

This surge in FII investment has led to the cumulative net investments by FIIs into Indian equities to total US$ 52.76 billion by the end of November 2008, since December 1993, when FIIs were allowed to enter India. As of November 28, 2008, 1581 FIIs and 4824 sub-accounts were registered with the Securities and Exchange Board of India (SEBI).

Though in 2008, thanks to the global meltdown, FIIs were mostly net sellers, they reinstated their confidence in the Indian stock market in the first week of December. As per data available with the Bombay Stock Exchange, on December 4, 2008, FIIs invested US$ 61.83 million in equities showing confidence in the Indian stock market.

Simultaneously, the upgradation of India's sovereign ratings combined with the improvement in the macro-economic situation and growth fundamentals has led to a significant increase in FII investments in the debt market. Total investment in the country's debt market till November 2008 amounted to US$ 6.38 billion as against US$ 2.80 billion by the end of November 2007.

Some Investment Highlights

The Indian growth story has attracted global majors like CLSA, HSBC, Citigroup, Crown Capital, Fidelity, Goldman Sachs, Morgan Stanley, UBS, T Rowe Price International, Capital International and ABN Amro among others to enter the Indian financial market.

• Goldman Sachs picked up an 8.16 per cent stake in New Delhi Television Ltd (NDTV) and a minority stake in Sterling & Wilson Pvt. Ltd.
• RREEF Alternative Investments, the global alternative investment management business of Deutsche Bank, plans to invest over US$ 1 billion in the country.
• Goldman Sachs and Macquarie have acquired a 20 per cent stake each in PTC India Financial Services Ltd. They have both invested about US$ 16.06 million each.
• Temasek Holdings, Investment Corporation of Dubai, Goldman Sachs, Macquarie, AIF Capital, Citigroup and India Equity Partners (IEP) have each picked a combined stake of 10 per cent in Bharti Infratel at US$ 1 billion.
• Further, New York-based private equity firm, Kohlberg Kravis Roberts and Co. (KKR), has also invested US$ 250 million in Bharti Infratel.
• Private equity firm Blackstone has taken up a 26 per cent stake in MTAR Technologies for US$ 65 million.
• Citigroup, Morgan Stanley, Goldman Sachs and BSMA have picked up a combined stake of over seven per cent in Gitanjali Gems at US$ 23.51 million.
• Fidelity Investments International has picked up close to seven per cent equity in Transport Corporation of India (TCI) for US$ 10.72 million.
• JP Morgan Chase has invested Rs 250 crore (US$ 51.37 million) in BPTP Ltd, a Delhi-based real estate company.