Capital Markets

Investment demand is buoyant and investors in developing markets are more likely to invest in equities inspite competitive pressures are intensifying and this reflects the growing number of independent asset management companies, the ever increasing interest in Asian markets.

The Indian capital market has experienced a process of structural transformation with operations conducted to standards equivalent to those in the developed markets and it opened investment by foreign institutional investors (FIIs) and Indian companies were allowed to raise resources abroad through Global Depository Receipts (GDRs) and Foreign Currency Convertible Bonds (FCCB).

FDI equity inflows for the first quarter of the current financial year (April-June 2011) stood at $13,441 billion, an increase of almost 133% in dollar terms, over the corresponding period of the last financial year.

As the economy is getting robust worldwide India‘s corporate sector will invest 40-50 billion USD in foreign investment in this current financial year.

The financial services industry in India has to play a vital role in the coming years by offering many innovative products to suit the varied requirements of the millions of prospective investors spread throughout the country and Asset Management Mutual funds are expected to grow at a CAGR of 17% between 2010 and 2014 to become a USD 300 billion industry.

India corporate sector has invested 2,65 billion USD in the month of May 2011 in External commercial borrowings and foreign currency convertible bonds.

The Government of India has approved fund raising worth US$ 13,24 billion by companies through external commercial borrowings (ECB) or foreign currency convertible bonds (FCCB) for infrastructure projects in the financial years 2011-2012.

A number of asset management companies are finding their profitability squeezed due to demand for stronger risk products and this will inevitably lead to greater scale to consolidate in foreseeable future.

We believe that India’s economic transformation is irreversible and macroeconomic fundamentals, greater integration with the world economy have increased India’s global competitiveness, placing the country on the radar screens of investors the world over.