Date: 11th July 2024 | Publication: Ausbiz
Mugunthan Siva from India Avenue Investment outlines that while India’s weight on the global market cap is rising, foreign investors remain hesitant. He indicates that the size of India’s market is just over 4% of the global market cap, and taking almost 20% of the all emerging market index. Mugunthan clarifies that amid India’s remarkable growth, foreign investors have been cautious because of the seemingly high valuations, compared to other regions.
According to Mugunthan, equity participation in India is increasing, although it has been relatively low, growing from less than 2% ten years ago to 6 to 7% today. This shift is exhibited by the growing focus on wealth and financial asset investments among Indians, who traditionally held physical assets. It is this change that has confounded global investors who are grappling with the interpretation of valuation in the context of this expanding local participation. Mugunthan draws a parallel with the growing trajectory of US investors investing into their own market about 50 years ago.
