Mutual funds remained bullish on the Indian equities in 2022-23 and invested Rs 1.82 lakh crore largely due to a strong interest from retail investors and the correction in the market that led to reasonable valuation.
This comes following a similar amount of Rs 1.81 lakh crore invested by mutual funds in the stock market in preceding financial year 2021-22 (FY22). Before that, they had pulled out Rs 1.2 lakh crore from equities in 2020-21, according to the data with the Securities and Exchange Board of India (Sebi).
Going ahead, equity outlook for the current financial year (FY24) will start improving in a couple of quarters once inflation starts coming down in the US and its central bank — US Federal Reserve — will change its policy stance from hawkish to dovish, Rajiv Bajaj, Chairman and Managing Director of Bajaj Capital, said.
In the longer-term, India’s growth prospect is higher amidst concern of slowing growth in major developed economies.
“The Government’s favourable policies along with a focus on investment led growth (Capex Push) and improved balance sheet of banks will drive earnings growth in the near future. The PLI (Production-linked Incentive) policy and the China+1 drive, is likely to boost India’s manufacturing sector and contain our trade deficit. This is the reason why most of the investors are bullish on India’s growth story and what better to play it except through Indian equities,” he said.