“In a bold move, global hedge funds are finally recognizing the immense potential of the long-shunned Indian market, as they strategically increase their presence to tap into the nation’s thriving economy and burgeoning investment opportunities.”
Global hedge funds are increasingly setting their sights on India as an attractive market for investment. Traditionally, international investors have been hesitant to enter the Indian market due to concerns about tax issues and the ability to hedge investments through short-selling. However, recent developments have made India more appealing, including its growing depth and liquidity, as well as its emergence as an alternative to investing in China. Singapore-based hedge fund Dymon Asia Capital and Citadel Securities are among the funds and securities brokers that are now entering the Indian market. Dymon is applying for an investment advisory license and opening an office in Mumbai, while Citadel is looking to hire more investment professionals and engineers from India for its international equities team. The stock market valuation in India has doubled in the past three years, reaching as much as $3.8 trillion in September. This growth, coupled with India’s economic opportunity, rich pool of local talent, and stable regulatory environment, has led to increased foreign inflows into Indian stocks. Sectors such as energy, defense, technology, and pharmaceuticals are expected to benefit from this trend. In addition to traditional stock pickers, hedge funds with quantitative strategies are also flocking to India. Gao Capital, a multi-strategy hedge fund based in Singapore, is setting up infrastructure to trade derivatives in the Indian market. Meanwhile, larger global quant funds, such as Tower Research and Optiver, are expanding their presence in India as well. Despite the opportunities, challenges remain in navigating the Indian market, including regulatory requirements, taxation, and liquidity issues. However, many funds see the long-term potential of the Indian market and are willing to overcome these challenges in order to tap into its growing economy.