After a 'great year' for stocks, here's Uday Kotak advice for investors

"It is time for investors to be careful about where they invest with in the market, and not have a one-size-fits-all approach," Kotak said.

Kotak Mahindra Bank founder Uday Kotak is 'cautiously optimistic' about the outlook for the next year, and said that while India celebrates this year's booming stock market rally, equity investors need to be careful about volatility going forward.

In a video address on Diwali and the new Samvat shared on October 30, Uday Kotak said the stock market has rewarded investors very well this year, helping create growth capital for the future. "India as a nation has to move from being from savers to investors, and I am happy to see this transformation. This create a backbone for the economy to have the risk capital for future growth."

The year has seen a solid 25% return on the benchmark indices, with the broader market delivering nearly 48% gains, handsomely rewarding equity investors. Going forward, Uday Kotak has advised investors to be careful about the balance of their investment portfolio.

"It is time for investors to be careful about where they invest with in the market, and not have a one-size-fits-all approach," Kotak said.

Uday Kotak emphasised that India's stock market story now needs to become 'sustainable', since a large part of the investor base are first-time participants, who have joining only post the pandemic.

Adding that India's time has now come to "leapfrog among the top three economies in next 3-4 years", Uday Kotak complimented the government and regulators on ensuring "macroeconomic stability for the India growth story".

The stock market has also created capital for a wider range of businesses, as seen in the flurry of IPOs and fund raises through the year. "The capital markets have done a wonderful job," said Uday Kotak, letting "many flowers bloom".

This access to capital is critical for growth, Kotak implied, as "India's growth cannot be dependent only on a few large companies or groups, but should be spread across," he added.

Kotak also nudged Indian businesses to now embrace global competition, instead of asking for protection. "Indian companies must get competitive globally," adding that "the ultimate test of capitalism is pro-competition."

While the macros remain strong, the veteran banker adviced investors to keep an eye on parameters like inflation, fiscal deficit and CAD, for are under control right now.

He also underscored the need to now step up and make India a 'deep capital market', second only to the US.