Swarup Anand Mohanty, Vice Chairman & CEO of Mirae Asset Investment Managers, the Indian subsidiary of South Korea’s Mirae Asset, recently shared his insights regarding the Indian stock market and the mutual fund industry. While acknowledging that some market segments might be slightly overpriced, Mohanty emphasized that there are ample investment opportunities with good value, asserting the importance of astute portfolio construction.
During an exchange with interviewers Hitesh Vyas and George Mathew, Mohanty, who oversees assets of Rs 1.61 lakh crore, highlighted a transition towards financial assets. This shift, however, is not at the banks’ expense. According to him, the public’s growing financial savvy and emphasis on investment over traditional savings methods have contributed to this trend.
Swarup Anand Mohanty talks about competition in the mutual fund arena, signifying that substance now outstrips brand reputation. He cites the entrance of big names alongside unfortunate exits from the Indian market, labeling India as a goldmine for future wealth generation, and expressing bewilderment at these strategic withdrawals.
The mutual fund industry is seeing consolidation, and as per Mohanty, India’s accelerated wealth creation is prompting more homegrown players to start their asset management firms. He observes a strategic change among global entrants who are approaching the market differently, often through partnerships or gradual ownership increases.
Addressing the growth of investment in mutual funds over bank deposits, Mohanty refutes the notion that bank deposits are being drained into mutual funds – the numbers don’t support this. However, post-demonetization and COVID-19, an increasing number of people have been shifting to financial assets but not at the cost of traditional bank vehicles.
Mohanty notes a significant increase in mutual fund folios, a change accelerated by the pandemic. He acknowledges the gap that still exists when it comes to the Indian populace embracing mutual funds and sees the consistent rise in systematic investment plans (SIPs) as indicative of a growing preference for investment over savings.
When probed about India’s economic prospects for FY25 and the expected drivers of growth, Mohanty discusses the broadening of the economy. He credits schemes like the Production Linked Incentive (PLI) and the clean-up of banking balance sheets during COVID-19 as pivotal factors in strengthening the financial sector and bolstering growth.
Shifting the focus to the capital markets, Mohanty acknowledges areas where valuation is inflated, mainly due to small pockets that have witnessed significant rallies. On the other hand, beyond these, he finds several large companies that present attractive valuations for fund managers looking to construct solid portfolios.
In light of SEBI’s concerns about market froth in certain segments, Mohanty expresses agreement and discusses the implications for liquidity and the rational choices moving forward, including the need for corrections and rebalancing of investment flows away from small and mid-caps, which have recently experienced outflows and decreased inflows.
Regarding the Sensex reaching the 75,000 mark, Mohanty believes it reflects India’s genuine economic growth, especially in comparison to global growth rates. Nonetheless, he advocates for more action in terms of labor and land reforms and highlights employment and healthcare as critical issues to tackle.
Mohanty concludes by advising retail investors to align their investment horizons with their long-term goals, stressing the need for commitment to investments that suit their objectives, particularly with respect to planning for retirement. His words resonate with caution and optimism for investors navigating India’s dynamic investment landscape.
