I did an estimate of the potential money which can be invested in the markets over the next six months by the domestic investors.
Rs 6817 crs which investors will receive from the open offer from Daichi to Ranbaxy shareholders. Hopefully, greater portion of the amount should come back in the market.
Rs 15,000 crs cash lying with the Mutual Funds
Rs 40,000 crs can be invested by the Life Insurance companies. Note that Q3 and Q4 are normally the best time for the industry.
Rs 3,000 crs can be invested by the Banks and Financial institutions.
Then there is funds which might be invested by the retail investors directly, Venture capitalist/PE players buying through secondary markets, pension fund money and Promoters increasing their holdings through open market puchases. All this should ensure that the downside is limited with FII’s continuing their selling spree. My sense is that FII inflows should resume by the end of Q4FY09 as global situation improves and risk appetite returns towards equities.