Flawed to say domestic flows alone inflate India's valuations: Ridham Desai

India's market is now heavily driven by domestic investors, a trend that began in 2015 and could last for decades

The domestic markets have traded at a premium to emerging market (EM) peers long before the domestic investment boom, says Ridham Desai, managing director and chief India equity strategist, Morgan Stanley India. In an interview with Samie Modak and Sundar Sethuraman in Mumbai ahead of Morgan Stanley’s annual India Investment Forum, Desai said sustained foreign portfolio investor (FPI) flows will depend on India maintaining its appeal as a stable and high-return market. Edited excerpts:

 

What has driven the Indian stock market’s sharp rebound from the April lows? 

The market’s recovery can be assigned to three factors.

 

First, the Reserve Bank