How FIIs (Foreign Institutional Investors) invest in Indian stocks in a clear and simple way: --- 🧩 Who are FIIs? FIIs are large foreign entities like: Mutual funds, pension funds, hedge funds Insurance companies Sovereign wealth funds, or Investment banks They invest foreign money into Indian financial markets — mainly equities (stocks) and debt (bonds). --- 💰 How FIIs Invest in Indian Stocks (Step-by-Step) 1. Registration with SEBI FIIs must register with SEBI (Securities and Exchange Board of India). They do this through a Designated Depository Participant (DDP) under the FPI (Foreign Portfolio Investor) route. After 2014, all FIIs are now categorized as FPIs (Foreign Portfolio Investors). --- 2. Open Bank & Demat Accounts FIIs open: a Special Non-Resident Rupee (SNRR) account – to hold rupees, a demat account – to hold shares, and a trading account with a SEBI-registered broker. --- 3. Convert Foreign Currency They bring money into India through foreign exchange (USD, EUR, etc.), which gets converted into Indian Rupees (INR) through authorized banks. --- 4. Buy/Sell on Stock Exchanges Once set up, FIIs can buy or sell stocks directly on: NSE (National Stock Exchange) BSE (Bombay Stock Exchange) They trade just like Indian investors — through brokers, but with large volumes. --- 5. Investment Avenues FIIs invest in: Equity shares (cash market) Derivatives (futures and options) Debt instruments (government & corporate bonds) Mutual fund units Initial Public Offers (IPOs) --- 6. Repatriation (Taking Profits Back) Profits and dividends can be repatriated (sent back abroad) after paying taxes.