When FIIs come back, Nifty could be 30,000, says market veteran Raamdeo Agrawal

When FIIs come back, Nifty could be 30,000, says market veteran Raamdeo Agrawal

Raamdeo Agrawal, market veteran and Chairman & Co-founder, Motilal Oswal Financial Services Ltd, on November 14 acknowledged that India Inc's earnings are slowing down but said it is a temporary phenomenon and that FIIs will come back to Indian markets.

Speaking at CNBC-TV18 Global Leadership Summit, Agrawal said, "Earnings are slowing down, so there is a clear challenge for the earnings to come back. Maybe it would take 6 months for the earnings to come back, but they will come. We need fiscal or monetary help. And it will come. Have patience and wait. Foreigners are getting out today. But when they come back to buy, they won’t get the same prices. Maybe when they come back, the Nifty index will be 30,000. Foreign investors who exit India may not find a similarly competitive price to make an entry elsewhere."

Foreign institutional investors (FIIs) have been on a selling spree in India since 6-7 weeks due to various reasons like moving towards China, US markets looking attractive post-Donald Trump's big election win, cryptocurrencies getting boost from Trump's favourable comments, earnings in India not catching up with the valuations.

Speaking at a panel discussion titled "Investing in India's Today & Tomorrow" with Ramesh Damani, Owner, Ramesh Damani Finance Pvt Ltd, Manish Chokhani, Director, Enam Holding Pvt Ltd, Ashishkumar Chauhan, Managing Director & Chief Executive Officer, NSE, Agrawal said, "Patience is the most important thing to have while participating in the market. Another advice is to stay invested."

FIIs, who sold heavily throughout October, have continued this trend into November, offloading over Rs 21,000 crore worth of Indian equities.

The panelists also mentioned their future bets.

"Damani said a path for the country's growth is infrastructure. The opportunity for digital public infrastructure is the best. Agrawal said digital technology is a non-linear opportunity. It will be a boom for many firms. Manish Chokhani said if you are not invested in financials, go and make an investment now. Chauhan said wherever capital investment is there - technology, biotech etc, that is where the opportunity is."

When asked what advice he will give to new investors, Agrawal said, "Remain fully invested. Sometimes it is painful, but over time it works – the power of compounding. Patience in the market is most important. When markets are falling, you need to be patient."

Damani echoed Agrawal's sentiments.

"In 30 years, I have learnt that you cannot time the market, you need to invest in high quality stocks for longer period of time. The enduring lesson I want to give to the world is to understand how compounding works. My advice to new investors is you can’t time the market. Remain invested in high quality business and believe in the magic of compounding. Compounding is indeed the wonder of the world," said Damani.

Chauhan spoke about the growth of Indian market infrastructure.

"The infrastructure of the markets 25 years ago was like a "satta bazaar" . No one trusted the markets then. It was earlier smaller. Today it is 2.5x of the banking systems. Clearing corporations, depositories were the building blocks of the market that they were working on," said Chauhan.