At least seven or eight hedge funds are aiming to raise around $500 million in overseas markets to invest in emerging equity markets, according to India Infoline.
The hedge funds include Boyer Allan, Voyager India, Indus, Orris Capital and New Vernon, which has already raised around $150 million.
Voyager Capital has raised around $100 million through its fund dedicated to India and other funds have set a target of at least $100 million.
India Infoline reports that at least ten hedge funds have established offices in India which become viable for the funds once $70 million has been raised.
Meanwhile, Bloomberg reports that Indian stock markets would not have scaled recent peaks without the help of hedge funds.
The Mumbai Sensex hit a new record of 10,173.25 yesterday, 52 per cent up on last year's figure.