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India's ESG and returns attract global investors

India's ESG and returns attract global investors
India's ESG and returns attract global investors

According to fund managers who spoke at the Indian Venture and Alternate Capital Association's conclave held in Mumbai, India has a'maturing market where foreign investors who consider environmental, social and government (ESG) issues are confident about dedicating more of their portfolio. They cite India’s size, the improving outlook for returns and the advancement of ESG standards as the key differentiators.

Since 2010, India's SEBI, the market regulator, has expanded the scope of ESG-related regulations. The detailed Business and Sustainability Reports are now mandatory for India's top 1,000 listed companies.

Ralph Keitel of responsAbility Investment in Zurich, who spoke at the conclave, said that "India has clearly earned its space" when it comes to allocations by global investors.

Keitel stated that "Fifteen or?20 years back, India was a great place, but the returns were slower." He also sees the case for India as being stronger in the near future.

Investors said that the appeal of the country is based on its relative strength at a moment when global allocations across China, United States and other emerging markets are being reassessed.

According to the International Monetary Fund, India's economy will grow by 6.5% during fiscal years 2024-25 as well as 2025-26.

Neha Grover is the South Asia Lead for Private Equity for IFC. She said that ESG impact - having a positive impact on communities - adds value. Grover said that India is one of the best emerging markets for exits. This is supported by a growing IPO pipeline.

Keitel, from ResponsAbility Investments, also mentioned climate-related business opportunities as an area of'special interest'. He cited sectors like solar panels and mobility. He added that as incomes increase, environmental pressures intensify. (Writing by Urvi Dugar and Abinaya Vijayaraghavan in Bengaluru; Editing by Ronojoy Mazumdar)

(source: Reuters)