'No big deal': Mark Mobius says he'll stay bullish on India no matter the election results

Key Points

• Veteran emerging markets investor Mark Mobius said India's election outcome will not change his bullish views on the country.
• India's election results will be out on Tuesday next week. Prime Minister Narendra Modi and his ruling Bharatiya Janata Party are widely expected to easily win a third term as pre-poll surveys seem to suggest.
• "The big question mark is whether [Modi] can get a number of seats to change the constitution," Mobius told CNBC's "Street Signs Asia" on Thursday.

Veteran emerging markets investor Mark Mobius said India's election outcome will not change his bullish views on the country.

The world's most populous nation kicked off a multi-phase election on April 19, as nearly one billion people cast their ballots.

India's election results will be out on Tuesday next week. Prime Minister Narendra Modi and his ruling Bharatiya Janata Party are widely expected to easily win a third term as pre-poll surveys seem to suggest.

Modi has reportedly said he's confident the BJP and his coalition alliance will secure a total of 400 seats. But the margin of victory still appears uncertain, leading to some market anxiety among investors.

"The big question mark is whether [Modi] can get a number of seats to change the constitution," Mobius told CNBC's "Street Signs Asia" on Thursday.

"If it doesn't happen, no big deal," he said. "No big change, you can still see incredible growth trajectory for India going forward."

India's economy blew past expectation to grow a robust 8.4% in the October to December quarter due to strong private consumption and manufacturing activity.

The finance ministry further underlined the country was on track to becoming the world's third-largest economy by 2027, with a GDP of $5 trillion.

Foreign investors are in a "wait-and-watch mode" ahead of the election results, said Gautam Chhaochharia  head of global markets for India at UBS. 

"What we are telling investors is — look, there is short term event risk around elections, depending on the outcome, " he told CNBC's "Street Signs Asia." But India's economic fundamentals remain "very strong and solid."

Whether Modi returns to power with a simple or big majority, the government's big focus for the next term will likely be to make sure India's "manufacturing story" remains strong, Chhaochharia noted.

On Wednesday, S&P global ratings raised India's outlook to "positive" from "stable" as the country's robust economic expansion is having a constructive impact on its credit metrics, it said in a note.

"We expect sound economic fundamentals to underpin the growth momentum over the next two to three years," S&P said. Regardless of the elections outcome, the ratings agency expects broad continuity in economic reforms and fiscal policies.

India's infrastructure sector will be a big growth area, said Mobius. This is "why we are particularly interested in infrastructure related stocks in India — that's going to be a big push going forward," the investor added.

The success of the next government in funding large infrastructure investment without "substantially widening" the country's current account deficit will be critical, noted S&P.

If India can shrink the fiscal deficit significantly while achieving these objectives, "rating support will strengthen over time," it added.