Despite their unpredictable 'hot money' investment, these overseas entities have been amongst the most important drivers of Indian stock markets.
The huge inflows came despite the number of FIIs registered in India dipping to 1,742 this year from 1,759 at the end of 2012.
Many market experts expect a BJP-led government would be more pro-reform and speed up legislative steps needed to spur economic growth.
Destimoney Securities MD and CEO Sudeep Bandhopadhyay said, "FIIs are expected to be bullish on the Indian stocks in 2014, despite the US Federal's decision on tapering."
"FIIs are looking forward to a stable government that can move reforms process faster, irrespective of which political party comes to power at the Centre next year. Besides, a strong performance by BJP in the recent assembly elections have further strengthen the chances of a stable government at the Centre," he added.
This is the third time in history that net FII inflows for a year have crossed the Rs 1 lakh crore mark and analysts are optimistic about the next year. In 2010, overseas investors had made a record Rs 1.33 lakh crore (USD 29 billion) net investment into the share market.
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