With the markets in overdrive and FIIs investing over Rs 20,000 crore in May alone, Rukhshad Shroff, managing director and investment manager at JP Morgan, is gung-ho on the Indian market. Shroff, who manages $4.5 billion worth of India-dedicated funds of JP Morgan, told Sandeep Singh that he is collecting more to invest in India.
On investing in India
We are looking to invest in India. While we have investments of $4.5 billion through 12 India-dedicated funds, we are looking to invest more. We have been collecting money since the time before elections, to be invested in India.
On the state of the markets
Given the sharp rise in markets and currency, I think that there is a good possibility that the market falls to breathe and consolidate. However, we have seen the worst of the economy and the earnings and the recovery is on. Its pace will be determined partially by the policy and partially by the availability of credit.
On measures to boost foreign inflows
I think the government needs to create even more supportive environment to attract capital. Industries need to be opened up, policy reforms are required and implementation holds the key. Capital still is a mobile and scarce commodity, and India needs to compete for that. So we have to attract it and allow it to earn adequate returns in a transparent and fair manner.
On challenges before India and concerns among foreign investors
The government is running large fiscal deficit. However, it is the quality rather than the quantity of the deficit, which is a concern. If the deficit is created for long-term competitiveness then it is a good one but if it is recurring in the form of subsidy then it reduces the government’s ability to tackle a situation. It is not a monumental concern but it certainly is a part of the framework when you look at India.
On FII investment in India
Investments would continue to grow in India and will be driven by a sustainable growth, the scale of the economy, vibrant diversified corporate sector. Also we will have lot many large companies that will get listed. We do not have a listed insurance company. If LIC and BSNL get listed they will attract attention of world investing community and will be a big source of attracting money.
On growth projections for India
I have a perspective that the Indian economy will double from $1 trillion in 5 to 6 years. That means a nominal GDP growth rate of 13-14 per cent or a real growth of 7-8 per cent with inflation between 5 and 6 per cent. I think it is easily achievable and is not an abstract assumption. Energy, Infrastructure, financial services and tourism will participate more in this growth.