In a year when Indian equities emerged as the best performers in Asia and the country took advantage of a structural shift in supply chains from a pandemic-hit China, forecasts of robust economic growth are set to keep stocks on a firm footing.
Amit Khattar, head of Deutsche Bank’s investment bank unit, said India has benefitted from predictability around large deals and confidence on the reforms agenda. Foreign portfolio investors sold a net $18 billion this year of Indian assets but turned buyers in November and December. The IPO came after the government offloaded its decades-old, debt-laden flag carrier Air India to Tata Sons for $2.4 billion in enterprise value.
Goldman Sachs said current market valuations have priced in expectations of superior earnings growth over the next couple of years, noting that foreign flows could remain weak next year.