Tales from the road

Investor sentiment towards India has cooled, but the lack of interest could be a contrarian positive signal

- AKASH PRAKASH

I had the opportunity to spend some time with global investors over the past week. These are some of the smartest long-term allocators of capital, with good track records who also provide thought leadership for the industry. Having done this for many years now, I do have a sense of how preferences and themes can change over time.

What were the key takeaways for me? I have never seen such indifference to India as I saw on this trip. It was almost like what we used to see 20 years back. Everybody met, but more out of politeness and our long-term relationship. There was not one meeting where the allocators walked in with any intention to add to their Indian public markets exposure. They were happy to get an update, understand the argument as to why India is bottoming out in terms of relative underperformance, but there was no bias for action at all. Quite sobering.

The concerns around India remain the same. Valuations are too high. There is no economic and earnings momentum. We have no artificial intelligence (AI) play or beneficiary, and concerns around the lurch to populism. For the first time in many years, I got questions around the sustainability of the 7 per cent real gross domestic product (GDP) growth number that most used to take for granted. For the first time, I got asked why India cannot remain stuck as a lower middle-income country.