India needs more capital, not just investors, to boost the economy: Samir Arora

Helios Capital Management founder and fund manager Samir Arora on October 16 said India needs more capital, and not just more number of investors, to boost the overall growth and size of the economy.

Speaking at the 12th annual international convention hosted by the Association of National Exchanges Members of India (ANMI) in Mumbai, Arora said, "Increasing the number of investors increases the depth of the market, maybe reduces the volatility, but it doesn’t necessarily increase the returns that an investor might expect."

Arora was accompanied on the panel by Ramesh Damani, chairman of Avenue Supermarts and a member of the BSE, and Utpal Sheth, CEO and senior partner of Rare Group, a proprietary asset management firm founded by veteran investor and trader Rakesh Jhunjhunwala. The panel was moderated by Anuj Singhal, managing editor at CNBC-Awaaz and stocks editor at CNBC-TV18.

Seth, on being asked about the investment opportunities in the Indian market, answered by invoking the Big Bull’s quote - “Biggest risk in investing in India is not investing in India.” He further added that the mistake most investors make is "to be afraid of mistakes".

However, Seth noted that not differentiating "between gorillas and monkeys" was his biggest mistake as an investor.

Gorilla is a term used to describe a company that dominates its industry but does not necessarily have a complete monopoly.

“We might say buy right hold tight, but it applies only when you are holding onto gorillas. These are the companies with strong management teams, extremely strong business models, and leadership. But if the company is not a gorilla, and you are still holding it, then the opportunity cost is high,” he said.

According to Arora, he made a mistake of not sensing sooner that India is not just a destination for investing, but also for raising and investing. “For the last 25 years, Indian returns have been the highest in the world in terms of dollar. The Indian market, in dollar-term, is up around 10-11% compared to other contemporaries,” he said.

Notably, the theme of the 12th convention is “Amrit Kaal - celebrating the reach of capital market reforms propelling the growth trajectory.”

Resonating with the mood of the theme, Seth, when asked about the developing equity cult in the Indian market, said, “Public or private, debt or equity - every asset class of the Indian market will find a new level over coming years. We are privileged to be participating in India at this time.”

Ramesh Damani, too, hailed the Indian market's growth and the overall optimism, especially among the retail investors. He believes that retail investors have "come a long way" and are eyeing a "multi-year bull run" going forward.

In September this year, India leaped past the UK to become the fifth-biggest economy, and is set to become the third largest by 2029. Just a month before entering into the solid top five club, Indian equity market capitalisation hit a new record of $3 trillion.