There will be more FII money coming into India if a stable government is formed at the Centre after the general elections, says Mark Mobius, Founding Partner of Mobius Capital Partners.
"The FIIs were optimistic about India earlier also, but bureaucratic issues were the biggest hurdle. Hopefully, with the continuation of the Narendra Modi government, some of these bureaucratic barriers will be removed and there will be more money coming into the country," he added.
Mobius is happy about India's rising prominence among the emerging markets (EMs). "Unfortunately, Chinese weightage in the EM index is high at 30 percent and that of India is low. But hopefully, Indian market will grow enough in market capitalisation terms to weigh heavier in the index," he said in an interview with CNBC-TV18.
India is at the top of the list in their emerging market basket, he said, adding that it is time to find the right companies and make investments.
Talking about the themes they are interested in India, Mobius said they have got into non-banking financial area and like the manufacturing space, basically the fundamental elements of infrastructure, including cement, piping and cables. However, the house is not so upbeat on the big banks and prefer smaller companies in the financial space.
Talking about their wish list from the new government, he said infrastructure spending would definitely be one. The government already has great plans in the infra space but the problem is getting things done. "They need to push and get things done quickly. The second most important thing is reforms in the labour market because current labour laws are too restrictive," he noted.
Consumption is also a theme the firm likes and think it is as a be all and end all of investing in India though the stocks are not cheap.
The risk factor for Indian market would be chiefly global. "If there is a real downturn in global environment, it would impact India. Oil remains a very important factor. However, with the US dollar index going up, more Americans will look at overseas investments and if there is less investment in China then India could be a beneficiary of that. So the outlook even in difficult environment is good for India provided reforms continue,” Mobius opined.
First Published: IST