Permal finds India an attractive investment opportunity for several reasons. It is the fourth largest economy in the world – measured by GDP – and is growing at 7%-8% per year. It also has well-developed capital markets, including a fairly robust futures and options market on both indexes and single stocks. The Indian government also continues to allow investment from foreign institutions into more sectors of the Indian economy.
The CNX Nifty, which is an index of the top 50 stocks in the Indian equity markets, has since 1994 produced an annualised return of 8.6%, with virtually all the appreciation occurring over the last three years. Over the past year the Index has averaged 39% and 40% per annum over three years.