Ind-Ra's Investor Survey: Government Push on Infrastructure Key to Growth and Crowd-in Private Investments

India Ratings and Research (Ind-Ra) conducted its quarterly 'Fixed-Income Investor Survey' in August 2015, covering key fund managers, credit risk heads of banks, senior credit analysts, investment portfolio managers and select issuers.

This is a quarterly survey and aims to bring in focus what's on the mind of investors. The survey focuses on investment behaviour, understand the investment pattern, perception of the government and initiatives needed to boost investments. The survey looks at risk profile of the investors and relates it to savings and investment behaviour and helps understand the impact of regulatory policies on investment in the securities market.

Ind-Ra Fixed-Income Investor Survey August 2015 suggests that investors in India expect the governments push on infrastructure to be key to growth and also provide impetus to private investment. Corporate profitability and capital expenditure is expected to pick up only in FY17.

A majority of the respondents (64%) opined that Reserve Bank of India (RBI) should cut the policy rate to stimulate investments in the economy. A similar stand (52%) was taken to contain the rupee depreciation between INR64-67/USD.

Respondents (91%) were convinced that corporate performance will not improve in this fiscal, but were optimistic of a recovery in profitability and capex in FY17. Most of the respondents expect an improvement in credit conditions over the next 12 months.

Majority of the respondents (63%) believed India's fundamentals are strong enough to handle the impact of a US Fed tightening. However, a stimulus plan in Europe and the Fed tightening could push back RBI's rate cut decision by three to six months

A majority of the investors in the survey expressed a growing appetite in long term bonds, with most of them looking for instruments with over one year of maturity.

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