A practical, real-world guide to investing in India India's rapid economic growth offers obvious opportunities for foreign investors, but making wise investing decisions can be difficult for any investor without a deep knowledge of the country and its culture. With a vibrant democracy and an active press, India can be a complex and chaotic place in which investors can find it difficult to make investing decisions with confidence. This book offers an on-the-ground perspective on India from one of India's most successful value investors. Looking deeply into the internal realities that impact India's investment climate, Investing in India helps investors both inside and outside the country cut through the noise and find the facts that truly matter for anyone who wants to invest there. * Features charts of stocks, markets, and other helpful Indian economic indicators * Offers a real-world look at India's politics and governance; its financial system and capital markets; its asset classes and equity markets; the private equity scene; and the real estate market * Written by Indian value investing guru Rahul Saraogi
RAHUL SARAOGI leads Atyant Capital Advisors, advisor to the Atyant Capital family of funds. In the last 14 years he has focused on the Indian markets. His mission is to consistently identify the best 10-15 investment ideas from among the thousands of publicly-traded Indian corporations. Rahul s value-based investment philosophy stands apart due to his belief in the paramount importance of corporate governance, specifically how management operates with its minority shareholders in mind. While getting his undergraduate education at the University of Pennsylvania s Wharton School, he discovered Warren Buffett, Charlie Munger, Benjamin Graham, Phil Fisher, and Robert Cialdini.
Foreword xi Preface xiii CHAPTER 1 Understanding India 1 Agrarian Roots 1 India s Villages 2 The Role of the Family 3 Seven Generations 3 Colonialism and Its Impact on Indian Villages 6 Deep-Rooted Beliefs and Aspirations 9 Spirituality and Superstition 14 Villages Are Not the Same Anymore 16 Urbanization Is Changing India 17 Summary 18 CHAPTER 2 Government, Politics, and the Media 19 Is India One Country? 19 Democracy 21 The Rise of Regional Parties 22 Competition among States Is Healthy 38 The Goods and Services Tax 39 Is Democracy Holding India Back? 40 State of Political Affairs in India 42 Bureaucracy 44 Corruption and Rent Seeking 45 War, Terrorism, and Violence 48 Role of the Fourth Estate and Accountability 49 The Ultimate Free Market 49 Summary 50 CHAPTER 3 The Economy 51 Overview of the Indian Economy 51 India s Unique Economic Model and Its Legacy 55 India s Public-Sector Undertakings (PSUs) 56 Monsoons and What They Mean for India 60 The Problem of Indian Agriculture 62 Manufacturing in India 65 India s Infrastructure Defi cit 69 India s Services Economy 73 India s Natural Resource Wealth 74 Savings, Land, and Gold 77 The Macroeconomy 78 Summary 80 CHAPTER 4 Financial Architecture 81 History 81 The Banking System in India 83 Nonbanking Finance Companies 85 Financial Inclusion 87 The Reserve Bank of India 91 Equity Markets 97 Market Participants 99 Bankruptcy and Foreclosure 101 Risk and Capital 105 Summary 106 CHAPTER 5 Value Investing in India 107 Risk On, Risk Off, and Global Capital Flows 107 Liquidity, Volatility, and Risk 110 Value Traps 114 Corporate Governance 115 Capital Allocation 118 Business Fundamentals 125 Financial Strength 128 Relative Opportunity 128 Summary 130 CHAPTER 6 Looking Back 131 Real Estate 131 Private Equity 135 Equity Markets 139 Foreign Direct Investment 141 Debt Markets 142 Entrepreneurs and Businesspeople 143 Summary 144 Afterword 145 About the Companion Web Site 149 About the Author 151 Index 153