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1. INR Depreciation: A seasoned investor (assuming US investor) must cover this risk by shorting his INR position. This way, he only collects the alpha of the I
by csomar 4y ago
1. INR Depreciation: A seasoned investor (assuming US investor) must cover this risk by shorting his INR position. This way, he only collects the alpha of the Indian stock market while remaining neutral to the fluctuations of the INR.
2. Indian Taxation: This has been the trend in almost every country. The taxes do not matter if the yield is still higher than your Western yield. It'll pay for itself.
3. Money Outflow: In my humble opinion, this is the real concern. You can pay high taxes, and still come out ahead. But if you can't get your money out, that's a real problem. And companies will leave because of that. I think the uncertainty of one's money is what's preventing a foreign investment boom in India.
- nish93 4y agoAgreed with points on tax and repatriation, that is a core part of the service. On the depreciation, most of the depreciation has happened in the zero interest rate environment, which is unlikely to hold true in the medium term. But yes, agreed with the solve there of hedging the currency risk independently, cost of hedging has to be baked in though. If you are interested in the product, do check out the website / fill the form and we will reach out
- sanp 4y agoWouldn’t the depreciation be higher in a higher (US) interest environment? The gap between US interest rates and Indian interest rates is what determines depreciation and the RBI (effectively, the Indian Govt as the RBI has no real independence) has not been as aggressive in increasing rates. So, I see faster INR depreciation for the near future.