FOREIGN DIRECT INVESTMENT IN INDIA

FOREIGN DIRECT INVESTMENT IN INDIA

 

Broadly, foreign direct investment includes "mergers and acquisitions, building new facilities, reinvesting profits earned from overseas operations and intra company loans"^.In a narrow sense, foreign direct investment refers just to building new facilities. The numerical FDI figures based on varied definitions are not easily comparable. As a part of the national accounts of a country, and in regard to the GDP equation Y=C+I+G+(X-M)[Consumption + gross Investment + Government spending +(eXports - iMports], where I is domestic investment plus foreign investment, FDI is defined as the net inflows of investment (inflow minus outflow) to acquire a lasting management interest (10 percent or more of voting stock) in an enterprise operating in an economy other than that of the investor. FDI is the sum of equity capital, other long-term capital, and short-term capital as shown the balance of  payments. FDI usually involves participation in management, joint-venture, transfer of technology and expertise. Stock of FDI is the net (i.e. Inward FDI minus Outward FDI) cumulative FDI for any given period. Direct investment excludes investment through purchase of shares. FDI is one example of international factor movements

Top 10 Flls In India Based On M-Cap As On Sept '05	Market Capitalization of Investments as in December 2005 in US $ Billion*
HSBC	3.12
Morgan Stanley	2.42
Merrill Lynch	2.31
Goldman Sachs	2.26
CLSA	2.10
Aberdeen	1.96
Copthall	1.85
Citi	1.81
Genesis	1.80
Capital	1.71

*Based on holdings of more then 1% and above in Individual companies.
Sources Exchanges and company web sites.

The top 10 investments by Foreign Institutional Investors (FII) in India
Companies	Investment value in Billion$ - December 05	Market cap* as on Jan 04 2006	Trailing PE as on January 04, 2006*
Infosys	7.90	83790	38.6
Reliance Industries	6.30	129541	14.1
Bharti Tele	2.60	65198	29.7
HDFC	3.20	30962	27.4
ONGC	2.80	169108	11.5
Satyam	2.00	24752	29.3
HDFC Bank	2.30	22889	30.3
SBI	1.60	48322	10.5
	The FDI hot spots! Asian Investors European Investors North American investors China China China India India India Hong Kong Poland United States Australia Russia United Kingdom Vietnam United States Brazil