Who Invested in Stock Market?
There are different types of investors in the stock market.
- FII stands for Foreign Institutional Investor
(Foreigners who are invested in 1000’s of crores in Indian markets)
- FPI stands for Foreign Portfolio Investor
(Foreigners who are invested in 1000’s of crores in Indian markets like FII.)
- DII stands for Domestic Institutional Investor
(Mutual fund investors & Banks, invest in 100 to 500 crores)
- Bulk traders or Block deal Traders (Who are invest in 2 crore to 25 crores)
- Retail Investors.(Below 1 crore Investors are all retailers)
FII/FPI & DII activities play a big role in the stock market. It is important to Analysis of FII/FPI and DII relative to NIFTY price movement. Let us discuss clearly about FII and DII.
What is a ‘Foreign Institutional Investor – FII’?
A Foreign Institutional Investor is an investor or investment fund which is registered in the country outside the one in which it is investing. They can be insurance companies, hedge funds, mutual funds. This term is generally used in India and it refers to outside companies investing in India.
Usually FII invests in those countries which are developing economies like India. These types of economies provide high potential growth. All of the FII’s must be registered with SEBI (Securities and Exchange Board of India is the regulator for the securities market in India.) to invest in India.
A mutual fund in the United States sees an investment opportunity in a company of India, it can purchase the equity of that company and can take a long position.
What is a Domestic Institutional Investor – DII ?
Domestic Institutional Investors or DII are the Indian Institutional Investors who directly invest in the Indian financial markets. Domestic Institutional Investor can be hedge funds, mutual funds, banks, insurance companies, pensions companies.
*Note: Both FII’s & FPI’s activity almost same in Indian market. So we don’t need to discuss about FPI’s particularly.