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The overseas investment figures serve to reinforce anecdotal evidence of Indian corporates picking up stake in steel, pharma and oil businesses overseas in recent times.

Our Bureau

Mumbai, June 28 Indian corporate direct investments abroad have risen by a little over 2.75 times in the third quarter (October-December 2006) of last fiscal compared with the investment made in the first two quarters, provisional data released by the Reserve Bank of India show. The country recorded $6.4 billion in such investments for the third quarter against $2.3 billion in the first half of the last fiscal (April-September 2006).

Fresh investments in the three quarters ($8.7 billion) have been nearly two-thirds of the cumulative investments up to March 2006 taking the overall figure up to December 2006, past the $20-billion mark, at $21.6 billion. The overseas investment figures serve to reinforce anecdotal evidence of Indian corporates (both public and private) picking up stake in steel, pharma and oil businesses overseas in recent times. Investments have been routed through affiliate companies rather than made directly as the latter accounts for only a little over tenth of the cumulative investments.

In-bound direct investments too, have more than kept pace with outflows with the former recording a jump of over $10 billion in the third quarter last year over the figure up to September 2006.

Portfolio investments abroad by resident entities continue to languish at a little over $1 billion with the third quarter numbers showing a marginal decline of $27 million over the figures for the first half. Expectedly portfolio investments in equities by FIIs in the third quarter have shown a robust growth rate over the second quarter (36 per cent annualised) with the cumulative investments till date just short of the $60-billion mark.

With the SEBI reporting a net investment of around $54 billion, the resultant gap between the two numbers suggests that a combination of portfolio appreciation and cash awaiting reinvestment/repatriation is at work.

Outstanding NRI deposits with the domestic banking system has shown a trend towards acceleration with the latest quarter showing an increase of nearly $2 billion that is higher than the sum mobilised in the first six months by about $500 million.

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