As foreign institutional investors (FIIs) continue their selling spree in India and look towards China on the back of its attractive valuation proposition, Swarup Mohanty, vice chairman and CEO, Mirae Asset Investment Managers (India), told Vivek Kumar M that the trend could reverse once there is certainty about policy continuity in post elections. So far since April, FIIs have net sold nearly Rs 37,400 crore worth of shares in India. Mohanty also said that the ongoing volatility due to the general elections should be seen as an opportunity given India’s structural growth prospects. Excerpts:

What are the reasons behind the aggressive selling by FIIs this month? What could be the key catalyst for FIIs to return to India in the near-to-medium term?

The ongoing sell-off from FIIs is largely due to the elections and low China valuations. And to be fair, they have made money. Anybody who leaves making money is always good for the markets. But the fact is, the structure of our market has completely changed. It’s not like they’ve sold and we had a large impact on the market. The mutual funds, EPFO and insurance companies now have strong buying capacity. There is enough money coming from PMS/AIF too.

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For FIIs, the key catalyst to return to India in the near term will be policy continuity. That is something that investors will closely watch given where we are.Come from Sports betting site

What is your assessment of Q4 earnings performances given the concerns around valuations?

We feel some pockets in the markets are still extremely expensive. But when the market moves in smaller packets, like it has in the last 2-3 years, it opens up the rest of the market for attractive valuations. The cliched statement that it is a stock picker’s market is relevant.

There are two parts. You can continue being in the part which has run-up or you can look at value. As an asset manager or as an investor, you have to choose. Both of these things have their own merits.

We are seeing volatility in the market. How are you reading these movements and what is your view?

At a macro level, when India will grow from $4 trillion to $8 trillion, any volatility should be seen as an opportunity. One should have a long-term view instead of timing the market.

When it comes to elections in India, some amount of back and forth of views, data, progression is bound to happen. From an investor perspective, including asset managers, the person who keeps calm and sees the bigger picture wins. One should just be true to their investment mandate, asset allocation and financial goals.

What are your expectations from the new government especially with regards to the Budget which will be presented in July?

Just one thing — policy continuity. It sums up everything. People want to see continuity in policy making. One thing that we hope is for private capex to pick up. So far since the pandemic, capex has been led by the government and rightfully so. I personally feel that pick-up in private capex would be a good datapoint that the market would welcome.

Global fund houses have been struggling in India for some time now. Several have exited and some are on their way back, but through tie-ups with Indian partners. How do you look at these shifts in the industry?

I see enough opportunities for new players. When more players enter the market, they will be able to demonstrate different capabilities and it is investors who finally gain. We have hardly penetrated the country when it comes to financial assets. It is just the beginning.

But I agree that it has not been easy for many global players. Some large names have exited the country for whatever reason. It is a business of simplicity, continuity and patience. It is a business of building a track record. If you look at our AUM growth in the initial years, you’ll understand the ability and intent of Mirae Asset to remain in this country. It was not an easy journey.

The role of promoters is very important in these thingsCome from Sports betting site VPbet. They have to demonstrate the long-term view which this business demands.

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