Vinod Mathew

Mumbai, March 4

THE net FII inflows into the country in the first two months of the year have crossed $2 billion and, at this rate, simple arithmetic suggests that it should reach $12 billion by the year-end. The net FII inflow mark-up for 2005 is expected to be in the $10-15-billion range, said Mr S. Mukherji, Managing Director and CEO, ICICI Securities Ltd (I-Sec).

Seen against the backdrop of FII infusion to the tune of $6.6 billion in 2003 and $8.4 billion in 2004, the current year has all the makings of a blockbuster year for foreign funds that are readying to take a deep dive into India. And it is this edition of the India story that I-Sec hopes to sell to a clutch of funds operating out of Far East, the geographical space that is currently rated only behind the US in its India interest.

"Post-Budget, this will be the first India show outside the country. Funds get a chance to find out first-hand, how various sectors in India are doing and going a step beyond, how specific companies are faring.

"We have got as many as 55 companies, including all the big-cap ones on a single platform. The effectiveness of the show can be gauged from the fact that as many as 400 one-on-ones have been lined up between Indian corporates and global funds," Mr Mukherji said.

The clutch of FIIs that will get to have a closer look at parking funds in India include the likes of UBS, Capital International, Aberdeen Asset Management, Alliance Capital, Morgan Stanley and the Government of Singapore.

From the Indian side almost all big companies are represented except Infosys and ICICI Bank, both being in the midst of ADRs.

Japanese funds, interfacing with the Indian market indirectly through regional funds till now, are expected to get directly into action in the coming days.

And it is this Far-East fund segment that I-Sec is eyeing through the three-day `India Unlimited' investor conference in Singapore next week. The expectation is that funds based in Japan, Hong Kong, Singapore will get more aggressive soon, expanding its present 30 per cent share in the $60-billion FII pie.

"We are looking at participation from Japan and even Australia to gather speed during this year. The outlook for fund infusion during 2005-07 period is between $30 billion and $45 billion. Almost all incremental infusion in the Indian markets is from FIIs," Mr Mukherji said.

Perhaps, the tone for the India Unlimited show would be set by the special session on `Can the elephant walk the dragon talk' by Prof John Wong, Research Director, East Asia Institute.

The Indian corporates will find out over the next week if it is the elephant or the dragon that enthuses the Far East fund managers. That will decide whether the Singapore edition of India finds more buyers than the New York edition sold by I-Sec last November.

(This article was published in the Business Line print edition dated March 5, 2005)
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