If the balance between demand and supply in Indian equity market tilts, a correction is possible, said Manish Chokhani, director of Enam Holdings, in a conversation with Moneycontrol.
Recently, demand and supply have drawn close, Chokhani said, with robust demand driven by domestic investors while foreign investors have largely been sellers. Supply is mostly created by stake sales from both foreign and domestic promoters, including divestments by Tata Sons and Vedanta in India, and similar moves from major firms in the UK, Japan, and Singapore, Chokhani added.
Recently, South Korea's Hyundai Motor Company sold 17.5 percent stake in its India unit through an initial public offering (IPO) in October. Also, Japan's Sumitomo Wiring Systems, promoter in Samvardhana Motherson International, sold 4.4 percent stake in the company in March.
Chokhani highlighted that while promoters and private equity firms have offloaded around $15 billion in shares, this capital isn't necessarily fueling new productive capacity.
“That money might return to the stock market, but it’s not contributing to fresh capital creation,” he said. Capital expenditure, however, is still underway, though it has shifted focus—from traditional investments like steel mills to modern infrastructure such as data centers, power plants, and semiconductors.
Chokhani cautioned that if a correction does occur, it would likely be triggered by external factors rather than domestic market dynamics.
The director said that this decade will be the era of emerging markets and hard assets like gold and silver.
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