‘Small, mid caps to be real winners’

MUMBAI: The fundamental character of the Indian economy that’s backed by 140 crore people, offers tremendous opportunities to investors and fund managers. For those willing to remain invested for 5-10 years, the winning bets could be in the mid and small cap space,

Mark Mobius

, founder of Mobius Ventures, said.

Mobius — called the emerging markets guru by top global fund managers — was speaking at Times Network’s flagship event India Economic Conclave held in Mumbai on Thursday.

“The opportunity in India is because of the numbers. You are talking about 1.4 billion people…average age at about 26 (years) compared to China’s 36 (years)…so, given the fundamental characteristics of the economy, you know there are great opportunities,” Mobius said. The veteran investor was joined by

Shankar Sharma

, co-founder of wealth advisory firm First Global.

Sharma said he’s spoilt for choice in the small cap space. The pack is a combination of both old line companies, which have realised they can’t do business the old ways, and also new companies, he said.

Mobius agreed with Sharma. “The value now is in medium and small caps,” he said.

In an earlier session, two of India’s top fund managers,

Prashant Jain

of HDFC Mutual Fund and

Nilesh Shah

of

Kotak

Mutual Fund, agreed that the Indian stock market is expected to give double-digit returns in the next 5-10 years, but there would be some volatility in between. Jain and Shah were joined by

Madhu Kela

, former chief investment officer at Nippon Life India (then Reliance) Mutual Fund.

Jain, however, asked investors to not worry too much about the current headwinds that the Indian market is facing, which have their origin outside of the country because of a several positive factors. “We have a good demographic, good regulatory framework, along with a supportive government and a favourable investment climate,” he said. According to him, in the current situation, it’s the bond market investors who should worry more than the ones in the equity market.


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