Can Rs 6.6 lakh crore in potential PSU divestments bring FPIs back to Indian markets? Axis Capital explains

The Indian government is planning to divest a significant portion of its stake in state-owned enterprises, potentially raising around Rs 6.6 lakh crore. This move could attract foreign investors, particularly Foreign Portfolio Investors (FPIs), back to the Indian markets. The increased investable equity pool, easing valuation pressures, and enhanced market liquidity are expected to benefit the economy, supporting fiscal consolidation and potentially limiting foreign outflows.

Why it matters

Faster government divestments could expand India's investable equity pool and ease valuation pressures. This could lead to increased foreign investment in Indian markets.

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