K V Kamath says India’s right to wait as AI hype plays out; backs strong valuations, buoyant IPO market, bank reforms

Veteran banker and Jio Financial Services chairman K.V. Kamath said the global excitement around artificial intelligence (AI) resembles the early dot-com boom and that India is wise not to rush into it. He also defended India’s current stock valuations as appropriate for a fast-growing economy, welcomed the surge in IPO activity as a sign of improving corporate governance, and backed the government’s consolidation drive in public-sector banking.

‘Better to wait than pay the early-mover premium’

Speaking at the Global Leadership Summit, Kamath said that while the world is witnessing an intense wave of enthusiasm over AI, “a bit of the hype has to die down” before the true economic value of the technology becomes clear. Drawing a parallel with the internet bubble of the late 1990s, he said that while today’s AI wave is more grounded in technology, it still carries elements of speculative excess.

He recalled the ‘dot com’ era when many companies “listed on Nasdaq saying they had no business plan, didn’t know whether they would be in business, and didn’t know when.”

Kamath said that India’s relative caution outside the immediate AI frenzy could turn out to be an advantage. He said the country has historically benefited from adopting major technologies after costs have fallen substantially, typically to 20-25 percent of the initial costs. “We lose nothing by waiting out six months, a year, a year and a half, two years, and joining the bandwagon when costs have come to what I call reasonable levels,” he said.

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He added that India should not suffer from a fear of missing out, observing that “being late to the party has always been good” because it enables the country to use proven and affordable technology rather than chase hype-driven trends. Entering slightly later allows for more practical deployment and avoids the premium associated with being an early mover. “Better be out of it at this point.”

‘Right price’ for a growing market

On the broader market, Kamath said he was comfortable with Indian equities trading at higher multiples, dismissing concerns that valuations were deterring foreign portfolio investors. “For a growing economy, this is the right price,” he said, while acknowledging that some individual stocks may show “exuberance.”

He also described India’s vibrant IPO pipeline as a healthy development, particularly in the technology and fintech segments. Kamath said the entry of new-age firms into public markets will “strengthen the core of what is happening in India” by subjecting them to market discipline and higher governance standards.

Growth momentum and banking reforms

Turning to the economy, Kamath said India’s long-term growth runway remains intact, supported by domestic capital and measured policymaking. He said India should “aspire for 10 percent growth.” He added that questions about funding growth are no longer relevant as instruments such as InvITs, REITs, and deepening capital markets have diversified financing sources.

On banking reforms, he praised the government’s decision to consolidate public-sector banks “at a time when things are good,” calling it “the correct move at this point in time.” It would bring “scale, bulk, and efficiency,” essential for a technology-driven financial system. Kamath added that public-sector banks should be allowed to attract more global investment, supporting a proposal to raise the foreign institutional investor cap from 20 percent to 49 percent to ensure a level-playing field with private lenders.

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