Dubai: India provides a lucrative opportunity for investment amid the worsening crisis in the global economy, industry participants said at a chartered accountants conference here.
While India accounts for 7 percent of the world's GDP, it accounts for only 2.5 percent of the world capitalisation market, ASK Investment Holdings Director Bharat Shah said.
Speaking at the Bahrain Chapter of the Institute of Chartered Accountants of India (BCICAI) in Bahrain, Shah said India's percentage share of global investments is just 0.5 percent, which logically has to increase considering the South Asian nation's share of the world GDP and market capitalisation.
"While the US and Europe are going through a serious economic crisis, the rapid growth of the Indian economy, backed by strong fundamentals, positions India as a favourite investment destination compared to the rest of the world," BCICAI Chairman T D Balraj said.
"There is evidence of corporate earnings growing at a faster pace than GDP growth in India. Corporate earnings are likely to grow at 15 to 20 percent, whereas the GDP is likely to grow at 9 percent.
This shows the market capitalisation growth is stronger than both GDP growth and growth in corporate earnings," Shah was quoted by Bahrain's Gulf Daily News as saying.
"The stronger growth in market capitalisation suggests the need for re-rating of Indian markets and greater valuations than the Indian markets have been commanding," he said.
According to Shah, the return on equity of Indian companies is far superior compared to comparable firms in other countries and India has a rich diversity of businesses and sectors, including information technology and other intellectual property-backed businesses.
He said the time was ripe for India to become a favourite destination for global capital.
First Published: Saturday, November 26, 2011, 15:05