Aug 27 Reuters Foreign investors are unloading their holdings of expensive Indian stocks and turning instead to new listings in primary markets as they seek cheaper exposure to the market and better returns.

Their selling has been driven by profit booking as Indian stocks trade at record highs, and at valuations topping those of most major stock markets.

Investors are pumping money instead into initial public offerings IPOs, whose valuations are lower and where there is less of a scramble for stocks.

Foreigners have so far sold a net 3.42 billion worth of equities in the secondary market. They purchased a net 1.47 billion through primary market issuances so far this month, according to India39;s Central Depository Services Ltd.

A Societe Generale SG report showed foreigners have bought more than 6 billion of stocks on the primary market this year, the highest since 2021.

Foreign investors are shying from deploying funds into secondary market for long term and seeing better and faster return prospects in the primary market, said Rajat Agarwal, Asia equity strategist at SG.

They are sellers in the secondary market this year partly because earnings growth prospects have moderated, he said.

India39;s NSE Nifty 50 index has risen 14 this year, and the 12month pricetoearnings ratio for its largeandmid cap stocks stands at 24 times, the highest among major global markets, according to LSEG data.

Meanwhile, the Indian primary market has been busy, with IPO listings of…