While the retail investor in India is increasingly becoming sceptical about investing in the volatile equity market at current levels, NRIs are taking a contrarian view on the same.

The NRI community, which till a few months ago was pulling out money, appears to have undergone a change in mindset. NRIs have invested nearly Rs 100 crore, in less than two months of the current calendar year (CY07). Albeit a small sum, but one needs to note that in the previous calendar year, NRIs were net buyers at less than Rs 8 crore. Experts feel that corrections witnessed in the recent past have made NRIs more bullish on the Indian market and as such are looking to reinvest.

?The data clearly shows that NRIs have been pulling out money earlier, which was due to reasons like high rupee-dollar rate and valuation concerns. In the past couple of months, the Indian market has corrected, forcing them to rethink,? said the head of a brokerage with a sizeable overseas presence.

He added that even though the rupee has appreciated over the past 2-3 months, the corrections witnessed in the equity market has led to NRIs increasing the quantum of their investment. ?This was not the case earlier, when the rupee was also appreciating and the equity market was also at an all-time high.? As per the BSE data, NRIs were net buyers at Rs 28.68 crore and Rs 70.30 crore in February and March, respectively. In January, they were sellers at Rs 2.16 crore.

?Real estate is one sector that NRIs have developed a liking for,? said a research analyst with a domestic brokerage. ?Most NRIs from the Gulf region seem to be eternally bullish on the infrastructure sector and ready to invest in any of the real estate companies. In addition, many of the first-time investors also prefer technology stocks,? he added.

Interestingly, the increase in inflows may well be the reason for many of the brokerages new-found partiality for the Gulf region. Although, more than a couple of Indian brokerages already have a presence in the Gulf, there are many more in the pipeline.

While Motilal Oswal Securities has opened a representative office in Dubai around 3-4 months back, JRG Securities received the provisional licence to form a JV in Saudi Arabia just last week. Even India Infoline and Angel Broking have chalked out expansion plans for the Gulf region.

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