India is at a vantage point of progressing at a compounded pace, riding on the back of deep reforms, said investing veteran Bharat Shah on February 23 at the PMS AIF WORLD's 5th annual summit.
“When reforms are deep, well-strung, and synergized, they become force multipliers,” said Shah, executive director of ASK Investment Managers, in his keynote address at the PMS AIF WORLD's 5th annual summit. By nature, reforms involve disrupting the existing status quo, and may run contrary to certain interests, he added.
PMS AIF WORLD is an alternates focused investment and wealth platform for high net-worth individuals and non-resident Indians.
Shah expressed disappointment at the expectation of India growing to become a $6-trillion economy in six years, saying that the nation must aim far higher than that. "If India's economy doesn't become $25-30-50 trillion, it will be a shame for us. A $6-trillion economy is a very insignificant number.
According to a report by the Centre for Economics and Business Research (CEBR), India's economy is expected to grow to about $6 trillion by 2030 and $10 trillion by 2035.
The government has done a lot of work, such as with regard to capital expenditure, and has brought in reforms that are now resulting in visible changes. The effort has brought India to a stage where the nation is headed for rapid growth, said Shah. “Therefore, growth will be higher compared to our history or to any meaningful comparable example, as reforms which make growth much more value-creating are getting built,” he added.
The market veteran with over 25 years of experience in investment management, further said that it is now on investors to take this game ahead, calling for greater participation from retail investors. “If individuals just comment on the market without participating in it meaningfully, it will certainly be a disservice.”
When asked about the upbeat sentiment in the PSU stocks, and whether there is enough steam in the engine to sustain this rally, Shah said that the rise in PSU stocks is not temporary. PSU stocks have come of age after being in the docks for a long period up till 2021, he said. In the last six months the BSE PSU Index has advanced 62 percent.
Things have changed and there is greater accountability demanded out of PSUs and have been given greater autonomy. Neglect from investors is not wise because the largest shareholders of such businesses have displayed a clear philosophical approach to how businesses are to be viewed, said Shah.
While earlier, private companies were seen to be better than the public sector stocks, the narrative has now changed, and PSUs are at par with private listed companies, he said.
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