Fall of rupee an opportunity for NRIs to invest in India?

Rajiv RajCreditvidya.com

The unprecedented fall in the rupee has bewildered most Indians. Some are worried about the rising prices of imported goods such as petrol, diesel and gold, while some are worried about the restrictions imposed by RBI to take money out of India.

Considering this, the Indian Diaspora in the USA holding greenback in hands must be rejoicing. In the current calendar year, the rupee has lost almost 20% against the US dollar.

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For a person holding dollar bills, mostly the non-resident Indians (NRI), it is surely an opportunity. A very simple interpretation is things become 20% cheaper for an NRI.

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Rajiv Raj

Founder & Director|Creditvidya.com

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For example, if a property in Mumbai quoted at Rs 5 crore in January 2013 and if the builder is willing to sell it to you at the same price even now, you are paying 20% less than what you would have paid for it in January.

If you are thinking of buying equities the ‘proposition’ is even more attractive. CNX Nifty, the Indian benchmark of equities, has fallen. Nifty has lost 9% in calendar year 2013.

So, effectively NRI can buy Indian equities 29% lower than where they were at the beginning of the year. In the equities given the weak sentiments, the ‘sale’ may be on for some time. It is the time to look at Indian equities with an investment mindset.

If you can invest in Indian stocks with five-year timeframe, may be this is the time to enter. You can also look at Indian bonds too as yields have soared up and you can lock in your gains.

If you are skeptical about the rupee and thinking of an even steeper fall in times to come, consider hedging yourself by locking in future exchange rate of the dollar against the rupee today itself. You can also see some dedicated investment vehicles such as NRI bonds coming your way in near future. These financial investments are liquid in nature. However if you are contemplating some substantial investments for the long-term, real estate markets should be on your radar.

There are not many transactions going through in residential and commercial real estate space due to poor demand in gloomy economy and if news reports are to be believed, all builders are leveraged to the hilt. This is a perfect recipe for a correction, if not a crash, in real estate prices in India.

The extent of fall in real estate prices is matter of mere conjecture. Even if you approach builders now, there are many willing to offer discounts. Some are keen to offer lower prices for group bookings. You can definitely take advantage of this. However, buying a property in India is not as easy as it appears. It is the time to start preparing for it, if you have not done it already. Get our acts together and arrange funds. If you are keen to take a home loan it is the time to check your CIBIL score.

It is better to check the credit report beforehand to avoid any unpleasant shocks due to issues such as identity theft. Even if you have been a disciplined credit user, it is better to be two times sure before entering a large transaction.

Because now is the time. A rupee quoting over 60 in comparison with the dollar is a myth that has become a reality. And if you don’t cash in on this reality then you are in a deep slumber. And this slumber may turn out to be the most unprofitable for you.

The author is the co-founder and director of creditvidya.com.