Mumbai: A BlackRock research platform has pegged India's current equity risk premium (ERP) around 4.9%, close to the metric's historical average, indicating that valuations may not be as stretched as high earnings multiples imply.
In its Mid-Year 2025 Global Outlook, BlackRock Investment Institute said stable policies and rising domestic demand have continued to attract strong investor interest in India, even amid elevated equity valuations. It believes that India's robust growth prospects justify the valuation premium over the long term.
ERP is a valuation gauge reflecting the extra premium that investors require to compensate for the additional risk of equity investment compared with a risk-free asset. The MSCI India Index currently trades at a forward P/E of around 22.5, slightly above its 10-year average and nearly twice that of broader emerging markets.
Among emerging markets, the Institute sees better investment opportunities in India, while favouring Japan among developed markets. "India offers one of the most compelling opportunities across emerging markets for investors looking to tap into mega forces," said Vivek Paul, head of portfolio research, BlackRock Investment Institute.
In its Mid-Year 2025 Global Outlook, BlackRock Investment Institute said stable policies and rising domestic demand have continued to attract strong investor interest in India, even amid elevated equity valuations. It believes that India's robust growth prospects justify the valuation premium over the long term.
ERP is a valuation gauge reflecting the extra premium that investors require to compensate for the additional risk of equity investment compared with a risk-free asset. The MSCI India Index currently trades at a forward P/E of around 22.5, slightly above its 10-year average and nearly twice that of broader emerging markets.
Among emerging markets, the Institute sees better investment opportunities in India, while favouring Japan among developed markets. "India offers one of the most compelling opportunities across emerging markets for investors looking to tap into mega forces," said Vivek Paul, head of portfolio research, BlackRock Investment Institute.
You may also like
Johnny Vegas refused to sell beloved teddy bear despite eye-watering offer
Paneer Do Pyaza: There is no dearth of people who like it, make this tasty dish at home like a hotel..
Bengal Police approach Calcutta HC accusing NCW of interfering in Anubrata Mondal case
Indian exporters hail US decision to extend tariff hike deadline to August 1
'Drink driver smashed into me at 60mph and left me in a coma, aged 19'
