PPFAS Asset Management is looking to set up a subsidiary in GIFT City and expects to launch operations there in the next six months, Rajeev Thakkar, Chief Investment Officer and Director, has said.
“We are setting up a subsidiary in GIFT City. We have applied to GIFT city regulator for subsidiary registration. The first product from this subsidiary could come in six months”, Thakkar told businessline in an interview.
He was in the capital to address the 8th Value Investing Pioneers Summit, organised by CFA Society India, an Association of Investment Professionals.
Thakkar highlighted that many investors from outside who do not want to get FPI registrations in India or NRIs who do not want to create PIS in India—individuals as well as institutions—can, through the PPFAS GIFT City subsidiary, get dollar-denominated Net Asset Value (NAV). They can invest in funds based in GIFT City and can also get Indian equity participation, he added.
“We are looking to introduce both inbound and outbound product”, he added.
Asked what the strategic benefit of setting up a subsidiary in GIFT City could be, Thakkar said that for foreign investors, it could mean lesser paperwork and no requirement of PAN. In the case of PPFAS, the benefit will be the ability to access a new customer segment.
FPI’s Heavy Selling
Thakkar highlighted that FPI as a category has multiple constituents—sovereign Wealth Funds, Pension Funds, Emerging Market Funds, and India-specific Funds. The reasons why they are selling are difficult to judge, as different people may have different needs.
“Some maybe facing redemptions. Some may be reallocating from India to other markets, some people maybe adjusting weights between bonds and equity market investments. These tend to be unpredictable. One overall theme however is they have been concerned on the valuation front for Indian markets,” Thakkar said.
He highlighted that it is not just FPIs who are selling; even FDI sales have happened, such as companies that have subsidiaries in India and have reduced their stake (Whirlpool, Hyundai).
Thakkar also noted that ‘Sell India, Buy China’ could be a reason for aggressive FPI selling.
He, however, expressed confidence that India’s story will continue playing out.
On record Initial Public offerings (IPOs) this year, Thakkar said that the number and size of IPOs have increased. “Even QIPs has been increasing. IPOs are tending to be aggressively praised.
If it continues at the same pace, it will soften stock prices. Liquidity may move from the secondary market to IPO markets,” he added.