PPFAS to Establish GIFT City Subsidiary Within Six Months, Targeting Foreign Investment.

PPFAS Asset Management is set to expand into GIFT City, expecting to establish a subsidiary and launch its first product within the next six months, according to Rajeev Thakkar, Chief Investment Officer and Director. Speaking to businessline at the 8th Value Investing Pioneers Summit, organized by CFA Society India, Thakkar shared that the company has already submitted its subsidiary registration application to GIFT City regulators.

Thakkar highlighted the strategic advantage for international investors, especially those avoiding Foreign Portfolio Investor (FPI) registrations or NRIs hesitant to establish Portfolio Investment Schemes (PIS) in India. Through the GIFT City subsidiary, these investors will have access to dollar-denominated Net Asset Value (NAV) funds, providing a simpler entry into Indian equities. "We are looking to introduce both inbound and outbound products," Thakkar noted.

Establishing a GIFT City presence also offers foreign investors fewer regulatory hurdles, such as the elimination of PAN requirements, and allows PPFAS to reach a new customer segment. Commenting on the complexities of FPI investment flows, Thakkar acknowledged the various factors affecting FPI selling, from sovereign wealth funds and pension funds to India-specific portfolios, each with its unique strategies. "Some may be facing redemptions or reallocating to other markets. Others might be adjusting between bonds and equities. However, one clear concern is the valuation of Indian markets," he explained.

Thakkar also cited recent examples of foreign direct investment (FDI) sell-offs, such as Whirlpool and Hyundai reducing stakes in their Indian subsidiaries, alongside a "Sell India, Buy China" trend contributing to aggressive FPI outflows. Nonetheless, he remains optimistic about India's economic potential.

Commenting on this year’s record Initial Public Offerings (IPOs), Thakkar observed that IPO activity has surged in both volume and size. He cautioned that this trend, coupled with rising Qualified Institutional Placements (QIPs), could soften stock prices as liquidity shifts from secondary to primary markets.

HBL