Foreign investors would like more equity coming out: Sachin Wagle, Morgan Stanley India – Economic Times

Posted: June 8, 2017 at 1:43 pm

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Foreign investors are willing to buy the India growth story and are looking for more issuances going ahead, said Sachin Wagle, head, global capital markets at Morgan Stanley India. In an interview with Sanam Mirchandani on the sidelines of the companys annual India summit, Wagle said the insurance and renewables sectors will be among the key themes in the primary market in the current financial year.

Edited excerpts:

What is the overall perception on India among foreign investors? The mood with regards to India continues to be positive. People are looking forward to participating more and putting incremental money to work in Indian equities. If you look at numbers year-tilldate, emerging markets have already seen flows of about $31 billion. Within that, incremental assets under management for the people who manage dedicated India money has gone up by $10 billion in the year-till-date. Overall, India and China will continue to attract capital.

What is on foreign investors watchlist in India? Flows are robust, they are willing to buy the India growth story, but commensurate to that you are not really seeing supply of paper. They would like more equity coming out of India. The challenge is that you yet havent seen sizeable large IPOs (initial public offerings) or followons coming in. They are happy that this year we have now started seeing some large follow-ons coming.

FY17 was a good year for fund raising by IPOs, how do you see FY18 turning out?

Last (financial year), we saw decent amount of IPOs coming to the market. Many of them were relatively smaller sized, but we saw good enough capital being raised in that $200-500 billion range. This year we have already started seeing large follow-ons coming. There are new products coming to Indian markets. We will see some REIT transactions happening. This year is going to be very different to that extent.

The government has set a record disinvestment target of Rs 72,500 crore in FY18. Do you think this is achievable?

The government has done phenomenally well. There is a lot of method going behind the numbers and the projections that finally go into the Budget. They have done their thorough excercise and unlike what you saw in the past where it was largely offer for sales, government is now embarking on IPOs. IPOs have opened up as an avenue for monetisation and the government is now even looking to go in for strategic sales. So, I dont see a challenge in terms of achieving the target. The government is also seeing success with CPSE ETFs which have done very well in terms of delivering returns.

The government is conscious that they need to achieve those targets and if you look at the track record of last year when they ended up exceeding, this year should not be any different.

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Foreign investors would like more equity coming out: Sachin Wagle, Morgan Stanley India - Economic Times

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June 8th, 2017 at 1:43 pm

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