You are on page 1of 7

Role of Foreign Institutional Investment in The Indian Capital Market

SYNOPSIS for the degree of MASTER OF BUSINESS ADMINISTRATION In Management

Submitted by: Meena Singh 2nd year student Roll no. 0803370028

Supervisor: Miss Meenu Thakur Lecturer CMS RKGIT,GHAZIABAD

College of Management Studies Raj Kumar Goel Institute of technology, Ghaziabad 2010

CONTENTS Introduction Research Methodology Objectives of the Research Plan of the Study

INTRODUCTION:
Foreign Investment refers to investments made by the residents of a country in the financial assets and productional processes of another country. The effect of foreign investment , however varies from country to country. It can affect the factor productivity of the receiptent country and can also affect the balance of payments. Foreign Investment provides a channel through which developing countries can gain access to foreign capital. Foreign Investment mainly comes in two forms: Foreign Direct Investment (FDI) Foreign Institutional Investment (FII) INDIAN CAPITAL MARKET: The Indian Capital Market was not in shape till independence. It was so because of poor industrial scene and resultantly existence of few companies in the country. There are 22 stock exchanges in India, the first being the Bombay Stock Exchange (BSE), which began formal trading in 1875, making it one of the oldest in Asia. Over the last few years, there has been a rapid change in the Indian securities market, especially in the secondary market. The number of listed companies increased from 5,968 in March1990 to about 10,000 by May 1998 and market capitalization has grown almost 11 times during the same period.

FOREIGN INSTITUTIONAL INVESTMENT: FIIs have been allowed to invest in the Indian securities market since September 1992 when the Guidelines for Foreign Institutional Investment were issued by the Government. The SEBI (Foreign Institutional Investors) Regulations were enforced in November1995, largely based on these Guidelines.

FOREIGN DIRECT INVESTMENT: Foreign Direct Investment (FDI) is a telling indicator of globa l economic health and stability. In 2000, global FDI inflows increased by 18 percent over 1999 levels to $1.3 trillion. FDI involves in direct production activities and is also of a medium to long term nature but FII is a short term investment mostly in the financial markets.

METHODOLOGY TO BE ADOPTED:
NATURE OF RESEARCH: The research is descriptive in nature and it involves the study of role and performance of foreign institutional investment on the Indian Capital Market. DATA: The type of data used for finding the impact and role of foreign Institutional investors on the Indian Capital Market are secondary data which is collected from different websites, journals, books and newspapers etc.

OBJECTIVES: The proposed research has the following objectives: To gain familiarity with the phenemenon and to achieve new insights into it. Why foreign investment came into being in India and with what purposes? To check the scope of FIIs on Indian Capital Market. To study the various strategies adopted by foreign investments

PLAN OF THE STUDY: Preface Acknowledgement Certificate Chapter1. Introduction Chapter2. Research Methodology Chapter3. Chapter 4. Chapter 5. Foreign Investment flows to India. Liberalisation of Foreign Investment. Pros and Cons of Forign Investment.

Chapter 6. Impact of recession on the Foreign Institutional Investment. Chapter 7. Impact and Role of Foreign Investment on Indian Capital Market. Chapter 8. Restriction on Foreign Investment in emerging Markets. Chapter 9. Findings and Suggestions. Bibliography References

REFERENCE: Websites: www.nic.in/finmin/ (Finance Ministry) www.sebi.com www.nseindia.com Journals: 1. Indian Capital Market
Vol XXIV/22 Dec 28, 2009- Jan 10, 2010 2. Indian School of Political Economy Vol XI No. 4, Oct-Dec 1999

You might also like