Mark Mobius of Mobius Capital Partners told CNBC-TV18 in an exclusive interaction that he has invested in Engineering and Research Development company Persistent Systems and other software companies as part of his India investments.

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"We are still in Persistent Systems and we are looking at other software companies so lots of opportunities," he said.

The veteran investors, regarded as the pioneer of Emerging Market investing explained that his exposure to India is currently at 20 percent, which is the highest he has ever had, compared to the historical exposure of 5-10 percent.

Besides software services, Mobius also spoke about various sectors in India:

Not Very Keen On Banks

The Nifty Bank index is up nearly 4 percent so far in 2023 after correcting nearly 2,000 points from its September 15 high of 46,310. On the other hand, the PSU Bank index has outperformed the benchmark with gains of 21 percent so far this year.

However, Mobius is "not very keen" on the banking space in general. "Usually, I am not too keen on banks, simply because the transparency is not very good with banks. As you know, very difficult to know, where the bad loans are hidden," he said.

Mobius went on to add that despite there being some incredible banks in India, he finds better value in software, industrials and the consumer space. "So, we prefer to be in those," he said.

Not The Right Time To Buy EMS Companies

Morgan Stanley recently initiated coverage on two high-growth Electronic Manufacturing Services (EMS) plays - Kaynes Tech and Syrma SGS Tech with an overweight rating with potential upsides of 20-25 percent over the next 12 months.

However, Mobius does not want to buy these companies at this point of time because they have not reached his Return on Capital (RoC) criteria just yet. "We look for at least 20 percent return on capital and many of these companies have not reached that yet. So we are watching them very carefully, and looking for opportunities," Mobius said.

The veteran investor said that India is likely to become a big hardware manufacturer in the times to come.

Cautious On Domestic Industrials

Mobius also expressed caution on domestic industrial companies which have also generated strong returns so far in 2023. He attributed his reluctance to buy them to the same Return on Capital criteria. He also mentioned that high debt of some of these companies keeps him cautious on this space.

(Edited by : Hormaz Fatakia)