India's Nifty is the best-performing index among large markets in 2022. This is partly because India appears to be lately the flavour of the season with foreign institutional investors (FIIs).
Bloomberg data showed that in the first quarter which ended on August 31, India's weight in the MSCI EM index jumped to the second highest, beating Taiwan. In fact, there is a buzz on the street that JPMorgan may include India in its EM bond index.
Why has the tide turned? According to Vetri Subramanian Chief Investment Officer at UTI MF, India has benefitted because it has been on the sidelines in terms of the Russia-Ukraine conflict.
“Most investors sort of appreciate India’s stance in terms of the strategic autonomy that we have. And I would say they understood India's position as enjoying strategic autonomy in terms of how we take our decisions,” he said.
Many of these global investors not only allocate to secondary markets, pension funds, family offices, private wealth managers, and insurance companies, but they also allocate to venture capitalists (VC).
Subramaniam is optimistic about not just the overall flows that could come from investors into equities in the secondary market, but also through the direct investment (FDI) route.
A lot more investors are now showing serious interest in India with a big shift in their investment thought process.
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“There's pressure from a lot of investors now to get India within the investable universe, particularly after the exclusion of Russia and concerns about having exposures in China. So suddenly, this is a tune, which is playing out to India's favour at this point of time,” he explained.
For the full interview, watch the accompanying video
(Edited by : Abhishek Jha)
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