Better days ahead for India Inc?

Mon, 16 Jun Pre-Open

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Thanks to Modi mania a rush of enthusiasm has propelled India's stock markets. QIPs, IPOs and rights issues!. Companies are making a bee-line to sell shares and attract foreign and domestic investors. Even investors are rocking the stock markets. They have been on buying spree ever since the new guard has taken the power at the center. Riding the Modi wave, are the overseas investors too. They have been flocking to the Indian markets in a big way.

"For longer tenure of investments, India is a better bet." That's what the ED of PWC has to say. And the statistics rightly corroborate his views. Know this! An Assocham study suggests India is to witness 100% increase in foreign investment during 2014-15. Also foreign investment inflows this fiscal is expected to exceed the figures of 2012-13, one of the best years for overseas investment inflows. Almost Rs 910 billion has already been pumped in by foreign institutional investors into the equity and debt markets in India until June this year. Not just that! Even international wealth funds and pension funds have been making staggering investments into Indian markets. Over US$ 5 billion has been invested by overseas funds in last 8 months.

With a stable government at the Centre, foreign investors have been optimistic about India's growth prospects. Moreover, with the government assuring resolution of policy issues stuck in courts and tribunals, global investors are eyeing key investments in India. India Inc has thus woken up to economic benefits of these foreign investments. Driven by hopes of economic recovery, sectors such as infrastructure, power and energy, retail and real estate are expected to see the day-light soon. Spotting the opportunities, global funds are locking big sums into projects of longer duration. Banking on this, India Inc is all set to raise money from the markets. Moreover, the compatibility between the new government and the RBI will play a bigger role. The need to control prices and address the fiscal side issues will go a long way in laying a strong foundation for corporate India. The sky is bright this time for the corporates.

The reform-friendly Modi government has set the ball rolling. Foreign investors are gung ho about the development of Indian economy after a period of lull. And that is supporting the corporate India. Restoring investor confidence and addressing manufacturing issues will enhance the Indian Inc's prowess we reckon.

Do you believe that the reform-friendly government will help revive corporate India? Share your views on Equitymaster Club.