Securities and Exchange Board of India (SEBI) on Wednesday announced that it had eased the restrictions by changing the rules around ownership disclosures for Foreign Portfolio Investors (FPI). In this article, we would try to understand this effect.
What happened
India’s market regulator, SEBI, made it easier for foreign investors by changing the rules around ownership disclosures. Earlier, if an FPI had assets worth more than Rs 25,000 crore in India, they were mandated to disclose detailed information about who actually owns the money, called “beneficial ownership” But now SEBI has increased this limit to Rs 50,000 crore.
This means that FPIs having assets worth more than Rs 50,000 crore in India have to report their undertakings. The decision has been taken amid an increase in the market size. The trading volumes for cash equity markets have more than doubled between FY 2022-23 and FY 2024-25.
How can it benefit?
This change is good news for smaller and mid-sized investors because it reduces paperwork and lowers their costs. It can also help attract more foreign money into India’s markets, which improves liquidity and makes it easier to buy and sell stocks. SEBI made this move because the Indian market has grown a lot in recent years, with trading volumes more than doubling. By updating the rules, SEBI is showing that it’s keeping up with the times and making India a more investor-friendly place, while still keeping a check on big players to maintain transparency.
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Major FPIs in India
1. Government of Singapore: The Government of Singapore has established itself as one of the largest FPIs in India. As of late 2024, its sovereign fund’s assets in India were approximately Rs 2.69 lakh crore, highlighting its substantial investment presence.
2. Europacific Growth Fund: Europacific Growth Fund is among the top FPIs in India. As of 2015, it held $131 billion in assets under management globally, with 6.4% of that invested in Indian equities, amounting to a significant stake in the Indian market.
3. Blackstone Group: Blackstone, a leading global investment firm, has a significant presence in India. As of April 2024, Blackstone’s equity investments in India totaled approximately $30 billion, making it one of the largest foreign investors in the country.
Written by Satyajeet Mukherjee
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