Here’s a quick primer on market conditions from our Investment Research wing, to help you make informed portfolio decisions. The current Nifty 500 P/E ratio is still at 29+, suggesting depressed returns from stock markets over the next few years. To understand this, let’s take a look at how the Indian stock market has performed in the past when P/E ratios were high. The chart below shows the average 5-year total return of the Nifty 500 based on different starting P/E ratios over the past two decades. As you can see, when the P/E ratio is 25 or more, investors make low single-digit IRRs over th ..read more

India has always been in love with real estate. We are ranked 126th in the world when it comes to median wealth per adult, and yet ranked 8th in the world by home ownership rate. Indeed, this disproportionate interest in property is warranted: real estate has historically enabled families to accumulate wealth in a safe and predictable manner. But for the most part, the selection of real estate has largely been an emotional one, with a preference for buying properties in familiar neighborhoods or curation based on hearsay. This has meant that, while property ownership has always been an aspirat ..read more

Backed by strong growth in India’s services sector, commercial real estate is experiencing an unprecedented boom. With annual office space leasing expected to be over 35 million square feet over the next few years, the largest cities of India are set to enjoy commercial property demand higher even than the United States, and behind only China. With the advent of digital marketplaces, REITs, and AIFs, these assets are no longer the exclusive domain of institutional investors. A large number of retail investors have begun to participate in this sector with a variety of investment goals. As alway ..read more

PE investments in Indian real estate have been growing rapidly. As of March 2019, SEBI data shows commitments towards Category II AIFs, which include real estate private equity funds, have touched $30bn. And yet, there is a curious dichotomy for investors: on the whole, the real estate industry is growing rapidly, and yet, many of their individual investments don’t seem to be paying off as well as expected. What explains the overall growth and returns of the industry and the highly variable outcomes of specific investors? How are certain types of funds able to offer consistently high IRRs on a ..read more