Indian expatriates have started investing in their home country in a big way as increasing job security in Gulf countries, coupled with fears of recession in Europe and North America, are prompting them to repatriate their savings, it is claimed.
‘The monetary crisis in Europe and America is forcing wealthy Indians to send their savings back to their home country. This trend may continue for some time, unless there is a dramatic recovery in the West,’ said Saurabh Mukherjea, head of Indian equities at London based Execution Noble Group.
‘Rich Indians living in Europe and America are investing in Indian equities, Indian real estate and Indian fixed deposits,’ he added.
The most popular investment asset for non resident Indians is real estate, closely followed by equities and high coupon debt, according to a report from Capitaline.
It found that NRI shareholding in companies like Rajesh Exports, Uttam Galva, Tanla Solutions, Graphite India and Carborundum Universal, among several other smaller companies, has gone up over the past 12 months.
‘NRI investments in India are showing a healthy trend. The confidence level of investors is high,’ said Krishnan Ramachandran, chief executive officer of Barjeel Geojit Securities, a Dubai-based brokerage servicing Indian clients.
He said Gulf based investors have become bolder after fears of job losses subsided. ‘There is a change in the way Gulf based NRIs are investing in Indian shares. Most of them prefer to trade in mid-cap stocks these days. They sell these stocks on gaining 5% to 10%,’ he added.
NRIs from the Gulf region account for nearly 25% of the total inflow of remittances. Apart from investments through Indian brokers, affluent investors also invest in India indirectly through participatory notes (PNs).
Such investments do not disclose the name of the investor or the benefactor. Many of those who invest through PNs are based out of Europe and the US, according to brokers with operations overseas.
Several Gulf based investors had redeemed or sold their investments during the Dubai credit crisis last year. The current flow of money to Indian shares can be seen as Gulf-based investors reversing those transactions, according to investment experts. While Gulf based NRIs are trying to benefit from investing in home markets, Indian expats in Europe and North America are sending back their savings to preserve it in Indian assets.