Meanwhile, the buoyant secondary

as on 31 July 2009. From a three-year closing low of
8,160.40 on 9 March 2009, the benchmark index has risen 7,509.91 points, or 92.02%, as on 31 July 2009.
Indian stocks are trading at around 17.5 times one-year forward earnings, lower than the valuations of the main in­dexes in Shanghai and Hong Kong but well above the level of Brazil, Russia, South Ko­rea and Indonesia. Investors
continue to bet that the deci­sive mandate for the Congress-led United Progressive Alliance (UPA) government in parliamentary election in May 2009 will help it pursue economic reforms such as PSU divestment, hike in foreign direct in­vestment ceiling in insurance, liberalisation of the banking sector, education reforms and tax rationalisation over the coming years. Reforms will help boost economic growth and corporate earning.
Another reason why foreign funds are bullish on India is that domestic consump­tion makes up almost 60% of India's economy. In the current low-growth world, India's 6.7% growth in the year ended March 2009 (FY 2009) was quite good. The big­gest positive for India is the strong demo­graphic profile and entrepreneurial talent. Seventy per cent ofIndians will be of work­ing age in 2025. Spending on infrastructure will also boost growth over the medium term. The government aims to raise investment in infrastructure to 9% of GDP by end of FY 2012, from less than 6% now. A strong growth in the economy is also necessary for poverty reduction.
Meanwhile, the buoyant secondary
market has revived the initial public offer (IPO) market. The recently concluded IPO of power generation firm Adani Power was subscribed 21.64 times. State-run hydropower pro-
ducer NHPC hits the capi­tal market with an IPO on 7 August 2009. As per Assocham, companies in in­frastructure, texti les and other sectors are planning to raise over Rs 16000 crore through IPOs in the remain­ing months of this fiscal.