The market often crashes and the reason is given as FIIs selling off. How do these FIIs invest their money in India? From what I know, the company only benefits from your money when you buy shares directly from the company, during IPO time. Once the stock lists in the market, people buy and sell among themselves and the company doesn't make any profit out of it.

When FIIs buy, do they buy directly from the company, and do they have a lock-in period? Because if they bought directly from the market, foreign money would come into the country, but it would go into the hands of individuals, and can't be called an investment in a company.

When foreign investors invest directly into Indian companies, it is known as FDI (Foreign Direct Investment).

Foreign companies, trusts, funds etc who want to trade in the Indian secondary markets have to register with SEBI as FIIs (Foreign Institutional Investors).

FIIs can take the FDI route too, but the FII figures reported by SEBI are the figures for market transactions and direct investments are not included in these figures.

Some years back. there was confusion whether pre-IPO, IPO, pre-FPO, FPO investments done by foreign investors should be considered as FDI or not.

I am not sure what the current status is.

SEBI and RBI lock horns on FII issue -

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