

CNX Nifty: 19,654 ICICI Securities Limited is the author and distributor of this report

07 October 2023 India | Equity Research | Strategy

Strategy

Indian equities dance to the tune of a challenging global environment and a largely resilient domestic economy!

The global environment remains marred by: 1) ‘Higher for longer interest rate’ environment driving rising borrowing costs for
households and corporates. 2) Higher crude prices. 3) The spectre of an impending slowdown in DMs and China. 4)
Geopolitical risks. Back home, the picture is relatively bright with growth trends appearing robust – PMI numbers, real estate
and auto sales, capex trends, GST collection, credit etc. The outlook for India's bond yield and currency is relatively stable,
helped by the country’s stronger fiscal position in the wake of robust tax buoyancy, impending inclusion of Indian bonds in
global indices, better inflation outlook due to near-normal monsoons and active policy measures to contain food inflation.
Within equities, consolidation in large-caps, accompanied by earnings expansion, is helping valuations, while the broader
market’s valuations are in a highly unattractive zone, albeit with higher growth expectations.

Large-caps’ market cap to GDP trends lower to reach 71% Vinod Karki
Since Sep’21, the large-cap universe’s market cap is up ~13%, while aggregate [email protected]
+91 22 6807 7586
PAT is up ~43% (20% CAGR) and nominal GDP has expanded by 30%,
Niraj Karnani
resulting in the contraction of P/E and market cap to GDP ratios. Yet, the mid-
[email protected]
and small-cap universe’s market cap demonstrated a significant rise during
the same period, thereby exceeding earnings and GDP expansion (Exhibits 1-
5).

Global macro headwinds rise

US bond yields rose to a 15-year peak of 4.9% – it is becoming increasingly
evident that the US Federal Reserve will continue to sustain the ‘higher for
longer’ interest rate environment. As a consequence, this is progressively
ushering borrowing costs higher for mortgages and corporate loans across
DMs. Even as interest rates remain elevated, the outlook for global growth
remains vulnerable to the Euro area and China. The US economy has been
relatively resilient so far, but there are signs of a slowing real estate market
and softer consumer sentiment in the latest readings. Rising crude oil price is
another risk to global growth prospects.

Domestic environment continues to cheer!

 GST collections are up 10% YoY at INR 1.63trn for Sep’23, while net direct
tax collections grew 24% till mid Sep’23 in the current financial year, helping
the fiscal deficit position.
 Sep’23 PMI: Manufacturing reading at 57.5 was robust, while PMI-Services
was even stronger at 61. Auto retail sales were robust (PVs 17.6% YoY and
2Ws 22% YoY), along with a pickup in auto wholesale volumes. Real estate
sales continue to pick up, as per media reports. Govt. capex growth till
Aug’23 in FY24 is up 46% YoY with states beginning to contribute strongly.
 Monsoon season ends with ‘near-normal’ rains (94.4% of LTA), which,
along with the government policy measures including export curbs on
essential food produce, should alleviate risks to food inflation. Water
reservoir levels remain low at 73%, which against the 10-year average of
92% is a key concern for Rabi crops.
 Weak global demand is impacting export demand, although the decline in
exports growth is reducing (-6.9% YoY for Aug’23).

Please refer to important disclosures at the end of this report

Strategy | 07 October 2023

Exhibit 1: Large-cap stocks’ market cap to GDP ratio approaching reasonable

zone, as stock prices consolidate and economic growth expands

Marketcap to GDP

120% Large cap

100%

80%

60%

40%

20%

0% May-04

Jan-11

May-14
Jan-05

May-06
Jan-07

May-08
Jan-09

May-10

May-12
Jan-13

Jan-15

May-16
Jan-17

May-18
Jan-19

May-20
Jan-21

May-22
Jan-23
Sep-03

Sep-05

Sep-07

Sep-09

Sep-11

Sep-13

Sep-15

Sep-17

Sep-19

Sep-21

Sep-23
Source: Capitaline, CEIC, I-Sec research

Exhibit 2: Mid and small-cap stocks’ market cap to GDP ratio at all-time high, as
market cap expansion exceeds economic growth

30% Marketcap to GDP

25% Midcap Smallcap

20%

15%

10%

5%

0%
Jan-07

May-22
May-04
Jan-05

May-06

May-08
Jan-09

May-10
Jan-11

May-12
Jan-13

May-14
Jan-15

May-16
Jan-17

May-18
Jan-19

May-20
Jan-21

Jan-23
Sep-03

Sep-05

Sep-07

Sep-09

Sep-11

Sep-13

Sep-15

Sep-17

Sep-19

Sep-21

Sep-23
Source: Capitaline, CEIC, I-Sec research

Exhibit 3: Over the past two years, large-caps have seen a contraction in trailing
P/E while mid and small-caps expand valuations
Only +ve PAT (2 year growth) Market cap (2 year return) P/E expansion (RHS)
45% 15%
11%
40% 10%
35% 5%
30% 1%
0%
25%
-5%
20%
-10%
15%
10% -15%

5% -21% -20%

0% -25%
Large Cap Mid Cap Small Cap

Source: Capitaline, I-Sec research

Note – Aggregate PAT, market cap and P/E is considered only for positive PAT companies (~2200 companies) as loss
pools distort the valuation picture. For aggregate numbers including loss pools, please refer exhibit 4.

India | Equity Research 3

Strategy | 07 October 2023

Exhibit 4: Reduction in loss pool within broader markets is adding to overall

optimism towards the asset class

PAT - including losses (2 year growth) Market cap (2 year return)

90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Large Cap Mid Cap Small Cap

Source: Capitaline, I-Sec research

Note – Based on ~3700 companies including loss makers.

Exhibit 5: Optimism towards broader markets emanate from better growth

expectations over FY23-25E
Free Float PAT Growth CAGR
INR mn
FY23A FY24E FY25E FY23-25E
Nifty Midcap 100 530,589 750,168 904,786
growth -2% 41% 21% 31%
Nifty Midcap 100 - ex Vodafone 577,681 792,376 941,454
growth -2% 37% 19% 28%
Nifty Smallcap 100 203,557 270,356 327,639
growth 11% 33% 21% 27%
Nifty50 3,448,207 4,114,378 4,745,228
growth 7% 19% 15% 17%
Nifty Next 50 - ex volatile 464,371 605,286 695,153
growth -3% 30% 15% 13%
NSE 200 4,259,459 5,442,819 6,309,872
growth 7% 28% 16% 22%
Source: Bloomberg, Capitaline, I-Sec research

Exhibit 6: Earnings yield spread of mid-caps, small-caps and micro-caps to large-

caps at highly unattractive zone, which will likely result in muted returns ahead

22% Mid Small Micro

17%

12% Attractive zone

Unattractive
7% zone
Unattractive zone
2%

-3%
Nov-21
Nov-10

Sep-12

Sep-23
Jun-04

Jun-15
Dec-09

Dec-20
Apr-17
Apr-06
Jul-03

Feb-08

Jul-14
May-05

Oct-11

May-16

Feb-19

Oct-22
Jan-09

Mar-18

Jan-20
Mar-07

Aug-13

Note: Large-cap – top 100 companies by market-cap rank, mid-caps – next 150 companies (101-250th rank), small-cap
companies – next 250 companies (251 to 500th rank), and micro-caps – next 500 companies. Above chart refers to
trailing earnings yield spreads of mid-, small- and micro-caps over large-caps at each point in time. Only profitable
companies are considered in the calculations.
Source: Bloomberg, Capitaline, I-Sec research

India | Equity Research 4

Strategy | 07 October 2023

Exhibit 7: US bond yields rose to a 15-year high of ~4.9%, resulting in volatility in

global capital markets
US Bond yield trends and Dow jones industrial average returns
18
16
14
12
10
8
6
4
2
0
1962

1965

1968

1971

1974

1977

1983

1986

1989

1995

1998

2007

2016
1980

1992

2001

2004

2010

2013

2019

2022
Source: Bloomberg, I-Sec research

Exhibit 8: Commodity prices have started rising – especially crude prices

Brent crude Aluminium Nickel

200 Gasoline Zinc Steel

180
160
140
120
100

80
60
Nov-21

Nov-22
Sep-21

Sep-22

Sep-23
Dec-21

Jun-22

Jun-23
Jun-21

Dec-22
Jan-22

May-22

May-23
Jan-23
Feb-22

Apr-22

Apr-23
Feb-23

Jul-23
Jul-21

Oct-21

Jul-22

Oct-23
Oct-22
Mar-22

Mar-23

Aug-23
Aug-21

Aug-22

Source: Bloomberg, I-Sec research

Note: Base has been reset to 100 from Jun’21 onwards

Exhibit 9: Macro outlook positive – Growth and inflation estimates by RBI

Real GDP Inflation

7.0% 6.50% 6.60%

6.40%
6.0%
6.0% 5.6% 5.70%
5.20% 5.20%
5.0%

4.0%

3.0%

2.0%

1.0%

0.0%
Q2FY24E Q3FY24E Q4FY24E Q1FY25E

Source: RBI, I-Sec research

India | Equity Research 5

Strategy | 07 October 2023

Exhibit 10: High-frequency data continues to be robust in Sep’23

Consumption Indicator Dec-22 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23

Personal Loan growth 20.0% 20.43% 20.39% 20.61% 19.44% 19.23% 20.90% 31.65% 30.76% NA
4W growth 7.2% 17.2% 11.0% 4.5% 31.7% 13.5% 2.0% 19.2% 27.7% NA
2W growth 3.9% 5.0% 8.8% 9.0% 16.5% 17.4% 1.7% -7.2% 0.6% NA
IIP - Primary Goods. 8.5% 9.8% 7.0% 3.3% 1.9% 3.6% 5.3% 7.6% NA NA
IIP Consumer Goods Durables -11.2% -8.2% -4.1% -8.0% -2.3% 1.2% -6.7% -2.7% NA NA
IIP Consumer Goods Non-Durables 7.9% 6.5% 12.5% -1.9% 11.4% 8.4% 0.3% 7.4% NA NA
Petrol Consumption 5.9% 14.3% 8.8% 6.8% 2.8% 11.0% 6.2% 6.3% 2.9% NA
S&P Global India Services PMI 58.50 57.20 59.40 57.80 62.00 61.20 58.50 62.30 60.10 61
CPI 5.72% 6.52% 6.44% 5.66% 4.70% 4.31% 4.87% 7.44% 6.83% NA
Passenger - all airports 23.1% 101.0% 64.4% 26.9% 25.5% 19.0% 20.5% 25.8% 23.2% NA
GST Collections (INR bn) 1,495 1,559 1,496 1,601 1,870 1,571 1,615 1,651 1,591 1,627
Consumer confidence index NA 84.80 NA 87.00 NA 88.50 NA 88.10 NA NA

Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23
Private final consumption exp real 6.77% 17.64% 14.23% 10.84% 4.68% 19.77% 8.31% 2.17% 2.83% 5.97%

Industrial Indicator Dec-22 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sep-23
Non-food credit growth 15.3% 16.7% 15.9% 15.4% 16.2% 15.63% 16.35% 19.81% 19.85% 19.94%
(fortnightly)
Industry loan growth 8.64% 8.74% 6.97% 5.72% 6.97% 5.99% 8.07% 5.75% 6.67% NA
Thermal plant Load factor 65.11 66.85 68.88 67.89 71.57 69.03 69.51 63.87 67.43 69.25
IIP growth 5.1% 5.8% 6.0% 1.9% 4.6% 5.3% 3.8% 5.7% NA NA
Core sector growth (%) 8.28 9.67 7.38 4.24 4.57 4.98 8.27 7.98 NA NA
Diesel Consumption 6.56% 12.70% 7.45% 1.15% 8.53% 12.74% 2.98% 3.79% 5.20% NA
Power demand 11.6% 13.7% 9.9% -1.7% -1.7% 0.7% 5.4% 12.1% 16.1% NA
IIP Capital Goods 7.8% 10.5% 11.0% 10.0% 4.4% 8.1% 2.0% 4.6% NA NA
S&P Global India manufacturing 57.8 55.4 55.3 56.4 57.2 58.7 57.8 57.7 58.6 57.5
PMI
WPI Commodity price index 5.02% 4.80% 3.85% 1.41% -0.79% -3.61% -4.18% -1.36% -0.52% NA
Cargo - Air -5.90% -3.67% 2.11% 1.45% 0.03% -0.34% -0.78% -1.16% 6.86% NA
Cargo - all ports 10.4% 12.2% 12.0% 1.5% 1.3% 3.5% 0.4% 4.3% 4.4% NA
Freight traffic - railways 5.96% 6.43% 4.65% 3.01% -0.62% -2.13% -7.64% -3.54% 2.15% NA
Import Growth (%) 1.47% -0.64% -4.90% -3.44% -13.63% -6.76% -17.48% -16.96% -5.24% NA
Export growth (%) -3.06% 1.55% -0.43% -5.87% -12.71% -10.31% -18.75% -10.07% -6.86% NA
Trade Deficit (USD bn) -23.15 -16.45 -16.16 -18.96 -15.49 -22.01 -18.75 -18.48 -24.16 NA

Industrial Indicator Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23
Capacity utilisation 69.40 60.00 68.30 72.40 75.30 72.40 74.00 74.30 76.30 NA
GFCF 13.99% 61.03% 12.42% 1.24% 4.95% 20.39% 9.59% 7.99% 8.92% 7.96%
Source: CEIC, Bloomberg, I-Sec research

Exhibit 11: Central and State government capex touches new high on TTM basis

15 State capex Centre capex

Combined capex of state and central

12 govt. touches INR 15 trn till Aug'23
8.6
7.4
9
Capex ( INR trn)

5.9

6 4.3
2.9 3.1 3.4
2.6
2.5
2.0 6.5
3 1.7 1.9 5.9
1.6 1.6 5.3
1.1 3.9 3.8 4.2 3.9 4.1
2.7 3.3
1.4 1.5 1.8 2.0 2.2
0
TTM*
FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

FY18

FY19

FY20

FY21

FY22

FY23

Source: CEIC, I-Sec research; Note: TTM represent capex data till Aug'23

India | Equity Research 6

Strategy | 07 October 2023

Exhibit 12: Govt. capex growth till Aug’23 in FY24 is up 46% YoY with states
beginning to contribute strongly

5m cumulative govt capex (YoY growth) 5m cumulative state capex (YoY growth)

60%
50%
40%
30%
20%
10%
0%
-10%
Jan-22

Jan-23
Dec-22
Apr-22

May-22

Jul-22

Apr-23

May-23
Feb-22

Jun-22

Sep-22

Jun-23

Jul-23
Nov-22

Feb-23
Oct-22
Mar-22

Mar-23

Aug-23
Aug-22
Source: CEIC, I-Sec research

Exhibit 13: State-wise agriculture output landscape and linkage with precipitation
Horticulture
Crops sown Livestock production in 2022
production in 2022
Rainfall Rice Coarse cereals Pulses Oilseed Sugarcane Fruits Vegetable Meat Milk Wool Egg
deviation
in FY24 so (ha (YoY (ha (YoY (ha (YoY (ha (YoY (ha (YoY (Tonne
States ('000 MT) ('000 MT) (Ton ‘000) (kg ‘000) (mn)
far over mn) %) mn) %) mn) %) mn) %) mn) %) ‘000)
LTA (%)
Manipur -46 0.2 -2% - - - - - - - - 468 377 29 76 - 115
Kerala -34 0.1 3% - - - - - - - - 3,025 3,043 464 2,532 - 2,230
Mizoram -28 0.0 2% - - 0.0 5% 0.0 70.8% - - 345 225 15 25 - 41
Jharkhand -26 1.1 37% 0.3 17% 0.3 5% 0.0 4.5% - - 1,312 3,965 79 2,629 232 877
Bihar -23 3.6 16% 0.4 5% 0.1 6% 0.0 -29.4% 0.2 -4.7% 4,987 17,855 392 12,119 172 3,067
Assam -20 1.9 -2% 0.0 21% 0.0 -3% 0.0 -36.5% 0.0 0.0% 2,504 3,747 56 982 - 542
Karnataka -18 0.9 -14% 2.3 1% 1.7 -15% 0.8 -20.9% 0.7 -0.6% 7,912 7,709 396 11,796 862 8,264
Uttar Pradesh -17 5.9 2% 2.0 2% 1.1 -4% 0.6 9.0% 2.8 16.6% 11,114 32,505 1,128 33,005 443 4,041
Meghalaya -16 0.1 6% - - 0.0 0% 0.0 0.0% - - 378 520 37 90 - 111
Lakshadweep -15 - - - - - - - - - - - - 0 0 - 7
Tripura -12 0.2 -6% - - 0.0 -51% 0.0 -40.7% - - 597 1,179 54 217 815 315
Arunachal
-12 0.1 1% 0.1 -1% 0.0 12% 0.0 -7.5% - - 138 17 22 46 15 67
Pradesh
West Bengal -11 4.0 5% 0.0 -26% 0.0 6% 0.0 6.6% 0.0 -6.3% 3,858 28,450 1,080 6,414 769 11,452
Nagaland -10 0.2 2% - - 0.0 1% 0.0 2.0% - - 316 456 24 61 - 35
Andhra Pradesh -7 1.2 -10% 0.2 -2% 0.2 -30% 0.3 -43.0% 0.0 -21.3% 17,665 6,366 1,026 15,403 - 26,450
Chhattisgarh -6 3.8 4% 0.4 22% 0.3 7% 0.1 6.1% 0.0 -3.1% 2,448 7,094 50 1,848 81 2,032
Punjab -5 3.2 1% 0.1 2% 0.0 -46% 0.0 -25.0% 0.1 -12.4% 2,328 6,171 228 14,077 449 6,066
Maharashtra -3 1.5 -2% 1.5 -2% 1.6 -14% 5.2 2.6% 1.4 6.8% 12,517 17,190 1,138 14,305 1,585 7,018
Odisha -3 3.4 -2% 0.5 12% 0.6 -1% 0.2 5.2% 0.0 5.3% 2,787 9,281 216 2,402 - 3,079
Haryana -1 1.5 9% 0.6 -6% 0.0 -23% 0.0 -13.0% 0.1 -4.7% 1,264 5,403 641 11,630 701 7,748
Madhya Pradesh - 3.4 5% 2.4 8% 2.0 3% 6.3 0.3% 0.1 33.7% 9,019 22,206 127 19,004 440 2,909
NCT of Delhi - - - - - - - - - - - - - - - - -
Uttarakhand 4 0.2 -1% 0.2 1% 0.0 0% 0.0 10.0% 0.1 -2.2% 649 1,041 18 1,856 - 514
Jammu and
5 0.2 -1% 0.2 -2% 0.0 84% 0.0 6.3% - - 2,425 1,890 88 2,727 7,681 183
Kashmir
Sikkim 5 0.0 0% - - - - 0.0 -72.4% - - 51 129 3 87 - 8
Tamil Nadu 8 0.4 -18% 0.3 -23% 0.1 -19% 0.2 -14.7% 0.2 5.3% 6,768 9,491 686 10,107 2 16,671
Puducherry 11 - - - - - - - - - - - - 15 50 - 11
Goa 12 0.0 0% - - - - - - - - - - 6 63 - 44
Rajasthan 15 0.2 4% 6.1 0% 3.5 4% 2.4 0.0% - - 995 2,208 221 33,265 15,207 2,688
Telangana 15 2.6 0% 0.2 -12% 0.2 -16% 0.2 5.4% 0.0 -25.0% 2,479 1,616 1,005 5,808 - 20,834
Gujarat 18 0.9 0% 0.5 2% 0.4 -11% 2.7 -0.6% 0.2 -17.2% 8,261 16,615 35 16,722 2,027 1,949
Himachal
19 0.1 0% 0.2 4% - - - - - - 754 1,878 5 1,615 1,433 102
Pradesh
Chandigarh 43 - - - - - - - - - - - - 1 57 - 11
Andaman and
55 - - - - - - - - - - - - 6 17 - 116
Nicobar Islands
Ladakh 103 - - - - - - - - - - - - 2 27 213 2

Total 41.12 3% 18.47 1% 12.26 -5% 19.29 -2% 5.97 8% 1,07,363 2,08,628 9,292 2,21,062 33,126 1,29,600

Source: CEIC, Department of Agriculture & Farmers Welfare, I-Sec research

Note: Red colour represents severe rain deficient, orange colour represents moderate rain deficient and white colour represents normal rainfall. In crop, horticulture and
livestock, green colour represents top 5 producing/sowing states. Ha means hectare while MT means metric ton

India | Equity Research 7

Strategy | 07 October 2023

Exhibit 14: Water reservoir levels remain low at 73%, against the 10 year average
of 92%, largely due to southern region; is a key concern for Rabi crops

Water reservior across region Sep'23 end Sep'22 end

100%

storage filled (%)

80%
60%
40%
20%
0%

Eastern Region
India

Northern Region

Western Region

Central Region

Southern Region
Source: CEIC, I-Sec research

Exhibit 15: Water reservoir levels remain low in southern states, Punjab, Tripura,
and Maharashtra

Water reservior across states Sep'23 end Sep'22 end India Sep-23 level

100%
storage filled (%)

80%
60%
40%
20%
0%

Rajasthan
Maharashtra
Uttar Pradesh

Kerala

Nagaland

Punjab
Tamil Nadu

Tripura

Chhattisgarh

Telangana
Himachal Pradesh

Uttarakhand

Gujarat
West Bengal

Karnataka

Jharkhand

Odisha
Andhra Pradesh

Madhya Pradesh
Source: CEIC, I-Sec research

India | Equity Research 8

Strategy | 07 October 2023

Market valuations snapshot

Exhibit 16: NIFTY50 forward P/E at 19x Exhibit 17: CAPE at 28.5x
1yr fwd P/E Avg +1 Stdev -1 Stdev Cyclically adjusted P/E Mean
+1 Std Devn -1 Std Devn
26 40
24
35
22 28.51
19.0
20 30

18 25
16
20
14
15
12
10 10

Sep-09

Sep-11

Sep-13

Sep-15

Sep-17

Sep-19

Sep-21

Sep-23
May-10

May-12

May-14

May-16

May-20

May-22
May-18
Jan-09

Jan-11

Jan-13

Jan-17

Jan-19

Jan-21

Jan-23
Jan-15
Nov-10

Nov-21
Jun-15
Sep-12

Sep-23
Apr-06

Dec-09

Apr-17

Dec-20
May-16
Jan-09

Jan-20
Feb-08

Feb-19
Jul-14
Oct-11

Oct-22
Mar-07

Aug-13

Mar-18

Source: Bloomberg, I-Sec research Source: Bloomberg, I-Sec research

Exhibit 18: Nifty P/B just above its long-term average Exhibit 19: Market cap to GDP at 110.9%

Nifty P/B LTA 170% MCap to GDP (Trailing)

8
150%
7
6 130%
110.9%
5 110%
4 3.40
90%
3
70%
2
1 50%
49.9%
0 30%
Sep-05
Sep-06
Sep-07
Sep-08
Sep-09
Sep-10
Sep-11
Sep-12
Sep-13
Sep-14
Sep-15
Sep-16
Sep-17
Sep-18
Sep-19
Sep-20
Sep-21
Sep-22
Sep-23

Sep-06
Sep-07
Sep-08
Sep-09
Sep-10
Sep-11
Sep-12
Sep-13
Sep-14
Sep-15
Sep-16
Sep-17
Sep-18
Sep-19
Sep-20
Sep-21
Sep-22
Sep-23
Source: Bloomberg, I-Sec research Source: Bloomberg, I-Sec research

Exhibit 20: Bond yield and earnings yield

9.5 Bond Yield Earnings yield

8.5

7.5

6.5 7.23

5.5
5.22
4.5

3.5
Sep-19

Sep-20

Sep-21

Sep-22

Sep-23
Jun-19

Jun-20

Jun-21

Jun-22

Jun-23
Dec-19

Dec-20

Dec-21

Dec-22
Mar-19

Mar-20

Mar-21

Mar-22

Mar-23

Source: Bloomberg, I-Sec research

India | Equity Research 9

Strategy | 07 October 2023

Exhibit 21: DII versus FPI flows

36
DII FII Equity
29
30 25 23
19 20
18 16 16
20 17 14 16 14 13 15
10
6 6 8 6
10 5 5 4
3 3

(USD bn)
0
(1)
-10 (5) (5) (5) (5)
(13) (11)
-20 (13) (17)

-30

CY23 TD
CY07

CY08

CY09

CY10

CY11

CY12

CY13

CY14

CY15

CY16

CY17

CY18

CY19

CY20

CY21

CY22
Source: Bloomberg, I-Sec research

Exhibit 22: Mutual fund flows into equities

30 MF
24
25
20 18 18
14
15
11 11
10 7 7
(USD bn)

3 3 3 4
5 2 1
0
0
(0) (1) (1) (0) (1)
-5
(4) (4)
-10 (6)
(7)

CY23 TD
CY00
CY01

CY03
CY04
CY05

CY07
CY08

CY10
CY11
CY12

CY14
CY15

CY17
CY18
CY19

CY21
CY22
CY02

CY06

CY09

CY13

CY16

CY20
Source: Bloomberg, I-Sec research

Exhibit 23: Volatility in FPI flows

FPI Debt FPI equity flow
11
9
7
5
3
(USD bn)

1
-1
-3
-5
-7
Nov-21

Nov-22
Sep-21

Sep-22

Sep-23
May-22
May-21

Jan-23

May-23
Jan-22

Jul-22

Jul-23
Jul-21
Mar-21

Mar-23
Mar-22

Source: Bloomberg, I-Sec research

India | Equity Research 10

Strategy | 07 October 2023

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