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India may remain preferred destination for overseas investors

India may remain preferred destination for overseas investors
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First Published: Tue, Feb 27 2007. 06 43 PM IST
Updated: Tue, Feb 27 2007. 06 43 PM IST
By Gautam Chakravorthy, Bloomberg
India may retain its position as a preferred destination for overseas funds because the economy is expected to grow more than 8% for the fourth year in a row.
The global economy is expected to have an “impressive growth” in 2007 that encourages cross-border portfolio investment to emerging economies, the government said in the Economic Survey for year ending 31 March presented to lawmakers today. The survey is a prelude to the budget finance minister P Chidambaram will present tomorrow.
The Bombay Stock Exchange’s benchmark, Sensitive Index had its fifth yearly gain in 2006 and more than doubled in the past two years. Demand rose from overseas investors, who bet companies such as ACC Ltd. and Larsen & Toubro Ltd. will benefit from the world’s fastest growing major economy after China. The government forecasts India’s economy will expand 9.2% this financial year.
Overseas investors bought a net $8.94 billion in stocks and bonds last year, compared with a record $9.46 billion in 2005. They placed a net $48billion in Indian stocks and bonds since they were allowed.
The total number of overseas investors registered in India rose 27% in 2006 to 1,044 while their sub-accounts increased 34% to 3,045, according to the survey.
Indian companies will continue to prefer raising money from the primary market through sales of bonds and shares, after raising a record Rs1.62 trillion ($36.6 billion) in 2006, according to the survey.
Companies raised Rs1.17 trillion selling shares to select investors, including founders. Of the total funds raised from the primary market 75 initial public offerings by companies raised Rs247.8 billion, accounting for 76% of the money raised, according to the survey.
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First Published: Tue, Feb 27 2007. 06 43 PM IST
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