Mumbai, Nov. 26: Warren Buffett says he has more cash than ideas. Thousands of miles away, fund managers in Mumbai are scratching their heads to find out if well-heeled investors like him share their idea of the great Indian market — and some of that money.
The answer to that question will decide if foreign institutional investors (FIIs) will be as smitten by India in 2004 as they have been this financial year — a time when they pumped in a staggering Rs 23,730 crore.
For now, nothing seems to suggest that their zest for India’s stock exchanges is waning. Except a reversal in Australia and UK, where interest rates have shown a modest rise in recent times after a long slide. Investors typically move out of stocks when rates rise.
“The growth of the Indian economy would possibly be among the highest in the world,” says Gul Tekchandani, chief investment officer of Sun F&C Mutual Fund. “So, India continues to be among the favourite investment destinations in the world,” he adds.
Arun Kejriwal of Kejriwal Research and Investment Services seconds him. The foreign investor’s worry about political stability does not stand any more — the ruling NDA alliance is into its fifth year. Nor is there a reversal of the reform process.
However, Indian brokerages and a few investment banks are not leaving anything to chance. They are courting foreign investors, including US pension funds that have been investing big in recent years. This is break from the past, when it was Europeans and south-east Asian institutional funds swarming India.
Recently, J. P. Morgan hosted leading foreign investors, an entourage that also had those who never picked Indian stocks. CLSA, a key foreign investment bank, mounted a roadshow to showcase the best of Indian Inc.
Indian companies have not been sitting back either. Some have glided across the globe in a hard-sell campaign that fund managers call “fashion parade”. Firms have also sponsored hordes of foreign investors on trips to places like Tirupur in Tamil Nadu to get a first-hand account of the renaissance in the textile industry.
ICICI Securities flew a posse of corporate top guns over for a pow-wow with Wall Street titans. The investment bank’s fourth India Unlimited conference, the second in the US, surpassed all records in terms of participation by corporate captains and policy makers, registrations by institutional investors and the number of one-to-one meetings that were organised.
The badge that these brand warriors are wearing in the FII serenade are speedy infrastructure projects, productivity gains and fiscal reforms, rejuvenated banking system and the “consumer tsunami waiting to uncoil”.
At India Unlimited, the three-day I-Sec gala, were honchos of Apollo Hospitals, Ashok Leyland, Bharat Forge, Indian Hotels, State Bank of India, Hindustan Lever, JVSL, Godrej Consumer and many more.
Even Anil Ambani, who was not part of the delegation, took time off to address fund managers through a video conference. Bajaj Auto’s Sanjiv Bajaj also pitched in that way. Vijay Kelkar was the government’s face there, clear misgivings fund managers had about policies.
So, at the end of it all, it’s over to Buffett, and his $24 billion that’s looking for promising places to go to. Folks on Dalal Street would be praying he buys into their ideas.