Foreign institutional investors play a very vital role in any economy. These are the big companies such as investment banks, mutual funds etc, who invest large amount of money in the Indian markets. With the buying of securities by these big players, markets tends to move upward.. They exert strong influence on the total inflows coming into the economy.
SEBI has over 1450 foreign institutional investors registered with it. The FIIs are considered as a trigger for the market performance by encouraging investment from all classes of investors which further leads to growth in financial market trends under a self-organized system.
An FII is an institution, which is established abroad and wants to make an investment in securities in India. The RBI has granted permission to Sebi registered FIIs to do under the PIS route. QFIs can invest in mutual funds, equity shares and corporate and government bonds.