The benchmark indices Nifty 50 and BSE Sensex have been steady gainers, with year-on-year increases of 20% and 17.5%, respectively.
India is emerging as one of the world’s most remarkable economic growth stories. According to India’s finance ministry, the country is set to become the world’s third-largest economy by 2027. In recent months, the Indian stock market has gained attention, overtaking Hong Kong to become the world’s fourth-largest in terms of total listed company value. The benchmark indices, the Nifty 50 and the BSE Sensex have been steadily rising, with year-on-year increases of 20% and 17.5%, respectively.
But for investors, focusing solely on the macroeconomic picture can be risky. Amit Dixit, Blackstone’s head of private equity in Asia, highlighted a common mistake: “A rising tide does not lift all boats. While many people know India’s macroeconomic story, if you just invest based on that, you risk losing.” Dixit stressed the importance of focusing on individual sectors and companies and identifying opportunities in technology, consumer goods, healthcare, and unregulated financial services.
Among the companies Blackstone has invested in India are IT services specialist Mphasis, IT services management firm R Systems, and automotive components maker Sona Comstar.
Blackstone began investing in Indian companies and assets 19 years ago, but Dixit described the first five years as “a rocky start.” Today, he said, “it’s still not an easy place for foreign investors.” Non-residents cannot buy shares directly through online trading platforms but can invest through mutual funds and exchange-traded funds (ETFs). American Depositary Receipts (ADRs) and Global Depositary Receipts (GDRs) also offer the opportunity to access foreign shares through local exchanges.
Dixit suggested a barbell investment strategy, advising investors to balance high- and low-risk assets to navigate uncertainty. “At both ends of the spectrum, there are significant upside opportunities for investors,” he noted.
Manraj Sekhon, chief investment officer at Templeton Global Investments, echoed Dixit’s optimism about India’s growth, citing several key drivers such as a shift toward manufacturing, digitalization that facilitates business transactions, and a growing middle class. In a session at the Milken Asia Summit, Sekhon highlighted how investors are willing to pay a premium for India’s growth, which is different from global variables that influence other markets.
Sekhon noted that while India has seen a 150% gain over the past decade for equity investors, missing the top 10 days of that period would reduce returns to 50%. He also warned that the country’s stratospheric growth may not be sustainable in the long term, noting that it is the result of factors that have developed over decades. “As market participants, we need to be cautious, as India is one of the most sought-after asset classes in the equity markets today,” he concluded.
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The information and considerations contained in this article should not be used as the sole or primary basis for making investment decisions. The reader retains full freedom in his or her investment choices and full responsibility in making them, as only he or she knows his or her risk appetite and time horizon. The information contained in the article is provided for information purposes only and its disclosure does not constitute and should not be considered an offer or solicitation to the public to save.|
Original article published on Money.it Italy 2024-10-11 07:02:00. Original title: Come fare soldi investendo in India, secondo Blackstone
