India more attractive than US, China, and Europe: Helios Capital's Samir Arora

India's investment landscape is garnering increasing attention from prominent fund managers and financial experts, who believe the country offers significant potential for returns in the medium to long term. Speaking to CNBC-TV18, Samir Arora, Founder & Fund Manager at Helios Capital, points out that historically, India has delivered returns in the range of 13-15 percent in rupee terms at the index level. In comparison to other major global markets such as the US, China, and Europe, India stands out as an attractive investment destination, suggesting that similar or even higher returns can be expected in the future.

"Today the relative situation of India versus other big pools of money - whether US, China or Europe, India looks better and therefore we should expect the same or more returns in the medium to long term," Arora said.

Arora emphasises the advantage India holds in the current investment climate, particularly due to the China+1 phenomenon. With companies and foreign institutional investors (FIIs) increasingly diversifying their exposure away from China, India emerges as the natural alternative and the primary beneficiary of this capital flow. Arora believes that India's credible government policies, coupled with its competitive position vis-à-vis China, make it an appealing choice for investors seeking to capitalise on this trend.

"On the FII side, it is clear that the emerging markets index has 29-30 percent in China and there are so many big voices saying that they either want to cap their investment in China or they are looking for Asia ex-China benchmarks. So the biggest beneficiary of that flow should be India because it is the most natural competition to China. Also what the government policies have done is, it has made India credible for those investors," Arora said.

Mark Matthews of Bank Julius Baer & Co, acknowledges his previous oversight of India's potential but now expresses a bullish outlook on the country's market. He lists out four key reasons behind his newfound optimism. Firstly, the Indian government has laid a solid foundation for a robust economy, and the ongoing developments build upon this groundwork. Secondly, the corporate sector has successfully deleveraged its balance sheets, and the non-performing assets (NPAs) of public sector banks have been effectively addressed. These factors contribute to a healthier and more resilient economic environment.

Matthews also highlights the shifting investment preferences away from China, which provides a significant opportunity for India to attract capital inflows. With China losing its status as the go-to market in Asia, investors seeking alternative markets are increasingly turning their attention to India.

"I wasn't always a bull on India and I regret that. However, I am now bullish on India. I think the Indian market can go higher and there are four reasons for that. The first reason is that the government has laid the foundations that are now being built for a very strong economy. Secondly, the corporate sector balance sheet by and large is deleveraged and PSU bank NPAs have been taken care of. The third reason is, China was the market in Asia that everybody wanted to be in, it isn't anymore and so that money can flow into India," Matthews said.

Another crucial aspect that Matthews considers is the role of banks in driving economic expansion. He emphasises that as the Indian economy grows, banks stand to benefit immensely. The positive trajectory of India's economy, combined with the improved position of Indian banks to lend, creates a favorable environment for increased credit activity. Furthermore, the high capacity utilization rate, ranging from 70-80 percent, underscores the potential for a long-anticipated surge in the capital expenditure cycle.

During Wednesday's trading session, the Nifty 50 index achieved a significant milestone by surpassing the 19,000 mark, reaching an all-time high. The Nifty hit its previous record high of 18,887.6 on December 1 2022, and since then it has taken a total of 142 trading sessions for the index to achieve this new record high.