Despite a slowdown and worries over rising fiscal and current account deficit, India is still attracting sovereign wealth funds and multilateral investors. Several of them are increasing their exposure in the country’s stock market, with the Bombay Stock Exchange benchmark Sensex last week crossing the significant 20,000 mark.
“The world’s largest sovereign — Abu Dhabi — and the biggest pension fund, of Norway, have been steadily increasing their exposures in Indian equity and debt securities,” a senior government official said.
These funds command close to $700 billion each.
Market analysts said investment by these funds have helped the Sensex cross 20,000.
Other funds such as the $236-billion California Public Employees’ Retirement System — the largest public pension fund in US — the Dutch pension fund and Denmark's LD Pensions are also looking to invest in India's equity, debt and infrastructure.
The official said “We expect the Abu Dhabi Fund to invest in some of the projects along the Delhi Mumbai Industrial Corridor (DMIC). They are confident of returns in this project.”
The DMIC project, conceived in 2006, got a fresh impetus in finance minister P Chidambaram’s budget.
Describing it as a “world class” infrastructure project, the finance minister had assured full funding support for the DMIC project, which is being developed in collaboration with Japan.
Japan has committed close to $5 billion in this mega-infrastructure project, which will cover 1,483 km between Delhi and Mumbai.
The Norwegein fund’s exposure in Indian stocks has went up by 38% to over $2.5 billion in 2012 from $1.8 billion a year ago, according the annual portfolio report of the fund.