Mr. Deepak Jasani- Head Retail Research, HDFC Securities on the raising of FPI limit for stocks by NSDL/CDSL:
While the raising of FPI limits for stocks to respective sectoral caps by NSDL/CDSL is welcome, the current sentiments of FPI towards emerging market equities is not very conducive so as to attract flows just on the basis of this relaxation by depositories. Also MSCI has stated in a release on March 31st that "MSCI will wait for the practical implementation of these changes and the systematic implementation of the new sectoral limits applicable to Indian securities before making any changes to the MSCI Indexes. It will provide further communication on this before June 30, 2020". Hence Funds that do not follow MSCI Indexes (and are willing to bet more on India under the current circumstances) will be able to invest more in select Indian stocks based on relaxed limits. However funds that follow MSCI Indexes would have to wait till at least June 30, 2020 or once the Ministry of Finance notifies these fresh limits after companies have been given time (beyond the original March 31, 2020) to restrict their FPI limits to a lower threshold.