India-dedicated funds have raised around $1 billion in Japan over the last one month, indicating a huge appetite for Indian equities in that market.
Mutual fund industry sources said four entities, Jardine Flemming, Fidelity, Prudential and Deutsche, have mopped up around $1 billion in India-dedicated funds in January alone. The money is being invested in the Indian markets.
In addition to India-dedicated funds, a few Japanese funds, including the Tokyo-based Nomura, have started collecting subscriptions to invest in Indian stocks, sources said.
“This has never happened before. The Indian market is a reality now and no one wants to miss it. Traditionally, there has been very limited funds flow from Japan," said a senior executive with a foreign brokerage.
Local fund managers cited a weaker dollar and attractive valuations of Indian stocks as the twin reasons from Japanese money flow into Indian markets.
Jardine Flemming and Fidelity have together raised around $750 million in Japan to be deployed in India. Prudential and Deutche Asset Management have raised $150 million and $70 million, respectively.
“More and more India-dedicated funds are being raised in Japan. We expect the quantum could run into a few billion dollars in 2005,” sources added.
The Middle East is also emerging as a new source of funds as the US-bound funds are being diverted to the Indian market now.
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