The Dalal Street market opened on a positive note, with Sensex and Nifty starting in the green. However, the early gains were short-lived as both indices quickly reversed direction, slipping into the red within the first hour of trading.
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00:00Hello and welcome. The Indian stock markets have been trending downwards and investors
00:06massively concerned about the future trajectory of the Nifty and the Sensex. If you've got
00:12all kinds of questions swirling in your mind about why this is happening, how long will
00:17it go on for and when does the recovery start, you're at the right place because three of
00:21India's smartest, shrewdest, brightest investors will be joining me on the news track. Sameer
00:26Arora from Helios, Shankar Sharma from First Global and Neelesh Shah from Kotak will be
00:32joining us on the news track for a special Unmissable Conversation tonight.
00:37Sensex and Nifty slide after September highs. 94.5 lakh crore investor wealth wiped out.
00:54Mid-cap and small-cap stocks hit hard. Selling pressure persists. How will stock market
01:16move next? Nightmare on Dalal Street.
01:23A whopping 94.5 lakh crore of investor wealth has been wiped out since last year's September
01:30highs in the markets. It's the mid-cap and small-cap stocks that are bleeding the most.
01:36Is it the effect of the Trump tariff threat or is a weakening rupee spooking investors?
01:42Why are foreign investors pulling away from the Indian markets and how long will this
01:48nightmare last? In just a moment from now, three of India's best-known investors will
01:52be joining us on the news track to share their thoughts and perspective on why we are at
01:57where we are and how long it is before the markets start bouncing back. But before that,
02:02let me take you through all that's been happening today and over the past several weeks.
02:07There is a palpable nervousness on Dalal Street. The bulls seem to have lost their mojo and
02:17it is the bears who are dominating the Indian stock markets. The Sensex, which was seen
02:26hitting the 1 lakh mark by the end of 2024, has slipped 15% since touching its lifetime
02:33highs in September. The broader base Nifty 50 is down 16%. In the process, a whopping
02:3994.5 lakh crore rupees of investor wealth has been wiped out. The worst hit have been
02:48the stocks of smaller companies, with the Nifty mid-cap 100 down 21% since hitting records
02:55high in September. The Nifty small-cap 100 index has fared even worse, down 25% from
03:02its highs. One of the top fund managers, in fact, had this to say about investing in SIPs
03:09and small-ticket stocks.
03:31It is not just the small and medium-sized players who are deep in the red. The big boys
03:36of the Indian industry, be it the Ambani, the Adanis or the Tatas, are all facing the
03:42brunt. The flagship companies of the three groups are fighting a losing battle against
03:47sellers. Reliance Industries has lost Rs 5,89,000 crore in value in the past six months. Adani
03:57Enterprises is down Rs 1.75 lakh crore. At the mid-cap of Tata flagship, TCS is down
04:05Rs 3.92 lakh crore from its record highs.
04:10So what are the reasons? China is again in favour with foreign investors after its $1.4
04:19trillion stimulus package. This has fuelled the sell India, buy China trade with FBIs,
04:26pulling out nearly $13 billion from Indian equities in 2025. Weak corporate earnings
04:33and an economic slowdown in the July-September quarter also contributed to the sentiment.
04:39Other reasons include global geopolitical uncertainties triggered by Trump tariffs and
04:45other factors, the fiscal caution in Budget 2025 and a feeling that Indian stocks are
04:51overvalued.
04:54What has emerged as a silver lining in the market is the participation of domestic investors
04:59who managed to counter the foreign sell-off in part.
05:29Nobody frankly has the precise answer, but I am delighted and privileged to introduce
05:56Samir Arora. Samir runs Helios, one of the top-performing funds. We've also got Shankar
06:01Sharma, founder of First Global, one of India's best-known investors. We've got Neelesh Shah,
06:06Managing Director at Kotak Mahindra Asset Management Company, someone who investors
06:11and the government listens to very, very carefully. So thank you, gentlemen, for taking our time
06:16and for joining us here. It is an absolute pleasure to have you with us because everyone's
06:21wondering ab kya hoga mere portfolio ka, where do things go next? So let me start by
06:26putting that question to Samir Arora first, because when people wake up day after day,
06:30they look at how their stock portfolios are doing, they get very worried. And the first
06:34question I have for you, Samir, is how long does this continue? When will this bleeding
06:38end?
06:39So the bleeding may end soon, I think soon, by soon also I mean one or two months. But
06:46then the repair of confidence of foreigners and domestic confidence might take another three,
06:53four months. So if we can get away in 2025, by recovering some of what we have lost this year,
06:59that would be good. But generally, you have to look at it a little bit wider lens,
07:04which is to say that when Indian or not Indian, just stock markets, when they outperform
07:09fixed income or debt markets by say 5-6% per annum, the only reason why they are able to do
07:16that is because it does not happen evenly. So over a cycle, which is broadly 7-8 year,
07:225-7 year depending on cycle, normally in the end equity markets do better. And this is true across
07:30markets across years across cycles. This is part and parcel of the game. And when it comes,
07:35it is very painful. But if you little bit look at it with a wider lens, it looks
07:39part and parcel of a normal way that these markets work, you need some excuse.
07:45In our case, the excuse was high valuations for small and mid cap stocks. Sometimes it would have
07:50been no excuse also, and then you will find some excuses. And that is how it happens.
07:55Shankar Sharma, Sameer thinks it will take at least a month or two before the market finds its
08:00bottom. From your lens, have we reached the bottom? How far is the bottom from here? How
08:06much more bleeding do you expect before the bleeding stops?
08:10So there are two things here. And of course, Sameer has given 1-2 months as the target.
08:17I mean, I think if you ask him, put a gun to his head, I think he might be a little bit
08:22more conservative than that. And I think because obviously, he is on television,
08:27he doesn't want to say things which might be a little bit problematic. And the problematic part
08:32is 1-2 months may not be enough for this damage to heal. And each time such a damage happens,
08:39it has happened. We've seen it in the past in 2000-2008. COVID was different. That was a
08:45specific event and a very different kind of a shock to the system. The shock got eliminated
08:50because of rate cuts and the market rebounded. But this kind of a, I can call it correction,
08:55bear market, is not an easy period to navigate for people because prices can fall sharply,
09:02they can rebound, they will rebound. I mean, it's fallen a lot. And the problem then happens
09:08and people start to believe that it's over. But such kind of problematic situations don't get
09:13over in a month, two months, even six months' time. It can be a longer period.
09:18And for this group of investors, set of investors, last three, four years,
09:22and they were told that markets are not cyclical by the wealth managers or whoever was advising
09:28them. The fact is markets are cyclical. They are 100% cyclical. And this is their first exposure
09:33to cyclicality. But the cycles are not short-lived. They take longer to form, they take longer to
09:40peak and then they take a little bit less to correct. But not like what happened in COVID.
09:46It might take a few months, even a year, maybe a year and a half, maybe two years to heal,
09:53get the, let's say, the pain out of the system, get the numbers adjusted to the markets because
09:59markets were probably factoring in growth in corporate earnings, which was very high.
10:03Maybe we're not getting that. I mean, all the downgrades are telling us the market
10:07numbers are too optimistic. All of that will take time. It will be a more protracted
10:11period of adjustment. And not like COVID, people should not mistake it for a COVID
10:16kind of situation, which was completely out of the blue, a black swan event,
10:23and it got solved relatively quickly. This is probably a slower burn. So yes,
10:27it is going to be painful. But then it's part and parcel, as Sameer said. I mean,
10:31I see no reason why these people should not suffer what we have suffered in 30 years.
10:36We have been through many such events. Let them also have one of their own.
10:40So Sameer said one or two months, Shankar Sharma saying one or two years.
10:43He's also accusing Sameer of saying stuff on TV, which is conservative,
10:48just because you want to keep your big social media army handy. So you're telling them things
10:53which you wouldn't be telling them off TV. May I say one thing? The question was different.
10:59And Shankar has answered it differently. The question is, when will the bottom come?
11:03I said the healing will take or the recovery will take six, nine months.
11:07I'm saying bottom at the pace at which it is happening and why I said one or two months.
11:11A, we want to see what happens in US in terms of tariff and all. And also in April, we'll see
11:17the sector that I'm most worried about, which is IT, as to how they deal with not just the
11:22uncertainty in US, but also the AI attack. So I was also, I'm not saying bottom today and
11:29back in action in one month. Okay, Neelesh, we've heard two
11:32different perspectives about how deep the wounds will bleed before the bleeding stop.
11:39What's your sense of how long should investors really brace for these
11:42turbulent and choppy weathers? I think investors should brace
11:47for choppy weather throughout their lifetime.
11:50If you're an investor, you have to be ready for volatility. And which is why we have always told
12:03people, be a long term investor. In the short term, market is like a voting machine, flows will
12:09drive. In the long term, market is like a weighing machine, fundamentals will drive. Right now,
12:14market is driven by FDI selling. They have made it clear they are selling,
12:19they have made it clear they are willing to sell at lower prices, not like crazily lower prices
12:25like COVID, but certainly at lower prices like today. The large caps are already below historical
12:31average valuation. So to some extent, they are in fair value. But if someone is willing to sell
12:37at lower and lower prices, market doesn't give easy exit. So I will summarize in today's flow
12:43driven market, as long as FDIs are selling, markets will continue to correct. The moment
12:48they are selling stocks, markets will bottom out. And thereafter, depending upon our fundamental
12:54session convention, markets will find its own way up. Interesting. So you're also mentioning,
13:02and I want to show this through data. If we compare how foreign investors have been selling
13:06month after month, and I've got data going back to October, every month, foreign investors have
13:11been selling and it is domestic institutional investors who've been buying. And the question
13:15really is, and Samir is usually based out of Singapore. And therefore, the question really is,
13:19when you speak to these foreign institutional investors at this moment, what is the outlook
13:25that you pick up about the Indian markets? Are they continuing to be negative? Or are they now
13:30beginning to find good valuations where they think that they can come in and step in and make
13:34purchases? Well, first is in our own, because we are also FPI, both on Jant, because we have only
13:40once a month inflow, both on Jan 31st and Feb 20th, we've got inflows. Small, but for our size,
13:46maybe 5-6% of our AUM. So the thing is, therefore, not everybody is a seller. And I think this has
13:53got mostly triggered because you see what happens is, one, this cycle starts that market is falling,
13:58then somebody on the margin panics and says, I'm also selling. And it started in October.
14:04Actually, September was 5-6 billion plus. And the whole of last year, if you count primary plus
14:10secondary, it was only $1.5 billion net selling. So real selling has happened, the surprise selling
14:16has happened in Jan and Feb. October last year, you could have justified by saying it is pre-empting
14:22Trump's victory and whatever may happen in the US market. And these two months, some of it could be
14:29because of slowdown and because then China started doing well. But these things cannot last at this
14:34pace. Currently, already, the FII selling is about half percent of market cap. And the average
14:41for the last 15-20 years, I saw in a Goldman report is some 0.3% of market cap. And in the
14:48worst of times, just COVID, it was 0.7. And right now, I think more than percentage and all, just
14:54look at it as time, that the pace at which these things are falling, and particularly in India,
14:59it cannot go on for more than a month here or there. Although you might lose 5-6% or I hope not,
15:05but at the index level and therefore 10% at some stocks level, you are in the end time period.
15:12But the problem is the recovery. Normally, a very sharp recovery will happen if there is some
15:18government intervention, even in the US, if they would print money, but not now, I'm saying in the
15:22past when these things have happened. So, if you want a fast recovery, something external has to
15:27happen. What can that government intervention be? Because this show, this broadcast is watched
15:32widely. I see you've been pushing for a change in capital gains taxes. What do you think this
15:37change can be? I have not been pushing. I've been highlighting that it is a wrong step.
15:43I am not, I am too small an FII to randomly represent other FIIs who will benefit of my
15:49hard lobbying in the press or on social media. It is just as a friend of the government or of
15:56India. I think it is completely wrong to be so isolated on a point. And then public says
16:02to me on Twitter and otherwise to each other, oh, these FIIs did not say this when the markets
16:07were doing well. Precisely. If the markets are doing so well, they will ignore any extra cost.
16:12But normally, markets don't do that well that you are making 20% pre-tax and therefore you
16:17are delighted to give tax. The point is we are standing out. But I am only highlighting.
16:22So, explain. What specifically are you hoping for and why do you think that might work?
16:27No, I am not hoping. I have just said it. You know, quickly this time I can tell you a quick
16:31joke that there was an oil man who went into heaven and he found that the heaven was full.
16:37So, he said oil found in hell. And everybody ran towards hell and then he also followed,
16:42saying maybe there is truth to this rumor. I don't want to on my own creation say this
16:47is happening. I am just saying it is wrong. Somebody should look at it.
16:52Shankar Sharma, what do you think is the current outlook at this moment of foreign
16:57investors? From what I gather from Sameer, he is saying that at some point in time this
17:00needs to end because this cannot, the bleeding by foreign investors, the selling cannot continue
17:04in this fashion for very long. At some point in time, the recovery will start as far as
17:08foreign investors are concerned. From all the foreign investors that you speak to and what
17:12you understand of their investing propensity at this time, how long do you think their
17:16negative outlook towards the Indian markets and Indian stocks will continue?
17:20No, let's, I want to stay with what Sameer has been talking about on social media, which
17:26has been very widely circulated. The fact of the matter is that there is no way, no
17:32matter how hard we shout, how hard industry shouts, that the government can roll back
17:38the capital gains taxes and the increases thereof. It's not possible. And I'll tell
17:42you a very simple reason. In fact, a couple of hours back, Sameer and I were chatting
17:47on WhatsApp. We were trying to reconcile the capital gains numbers. There is some,
17:51you know, it's not a precise number, but let's work with whatever was the number in 2023,
17:55FY. It was around 1 lakh crores from long-term capital gains. We don't know short-term capital
18:01gains. Let's say it was 50% or something like that. So, 1 lakh 50,000 crores. And then,
18:05of course, there is SCT, which back then must have been 30,000-40,000 crores.
18:09Now, fast forward to FY24 and 25, looking at the market the way they have done in the
18:14last couple of years, barring the last three months, I think this number might have doubled.
18:19So, you might be looking at a capital gains number composed for long-term, short-term
18:25of maybe 3 lakh crores. And then SCT, maybe 70,000-80,000 crores. You're talking a very
18:31substantial number now in your fiscal situation and overall pie chart revenue coming from stock
18:38markets. This has never happened before. This is the, I'm calling it the stock marketification
18:45of our national fist. That is a serious concern area and should be one for any economist or any
18:52market participant that earlier we had predictable sources of taxes on the personal, on the corporate
18:58tax, you know, on the direct taxation, which was corporate tax and personal income tax.
19:04Now, you've reduced both of them. 19 may reduce the corporate tax and this time you reduce the
19:09personal tax, but that slack has been taken up by stock market profits. You have an unpredictable
19:15source of taxation now dominating your growth in personal income taxes versus a more predictable
19:22couple of sources, corporate income and personal income tax. How sensible is that kind of taxation
19:28policy when you're betting on a continuation of a bull market, irrespective of whatever happens
19:33in the world of equities, irrespective of market cycles. We know markets have five-year cycles,
19:38roughly, give or take a year. It's not possible you can replicate this 90,000, 2 lakh crore,
19:432 lakh, 50,000, 3 lakh crores coming here. Impossible. In fact, because of the tax losses
19:50which have been incurred and harvested, you're looking at a barren spell for the next two or
19:54three years. You will not make any LTCG or STCG. It's not possible. And on STT, given the fall in
20:01derivative volumes, that's also going to halve. Problem is that when you are looking at a very
20:07low number on these three big dominant parts of your revenue growth from personal tax, what happens
20:13to the growth numbers? Because your CapEx budgets of 11 lakh crores are then in jeopardy.
20:21The government is clear it will meet 4.4% fiscal deficit. How do you meet it when you have a tax
20:26shortfall from this volatile source? You have to cut back on CapEx. Cut back on CapEx, you look at
20:31GDP growth numbers falling. I am very, very concerned about this whole stock marketification
20:37of our revenue inflows from the budget. And that to me is the single biggest risk to the markets
20:43from here on. Nilesh bhai, you serve on so many committees. I just want to introduce two of my
20:47colleagues who will be joining me in this questioning. Siddharth Zarrabi, Editor of
20:50Business Today, Shailendra Bhattnagar, heads up markets today at Business Today. But Nilesh bhai,
20:55you speak so often to those who matter in government. Is this something that you're
21:00talking to them about the fact that FIIs are concerned about capital gains taxation? And
21:04if that was to be corrected or changed, that the likes of Sameer Arora and Shankar Sharma feel
21:10could be the intervention that foreign investors are waiting for. But doing it outside the budget
21:16is also now quite uncommon. So how do you look at this debate that's playing itself out? And
21:20what do you think of it? So while it is legitimate for FPIs to demand parity in India, which they are
21:29getting from other markets, but as Sameer mentioned, if we deliver better return,
21:34then they don't mind paying taxes. And for all these years, we have delivered better return.
21:41So of course, one way to attract FPIs is by giving them tax exemption. But that will be following the
21:49true Gujarati Kaivak of gharna chokra ganti chaate, ane upadhyayane aato. The kids of the house does
21:56not have floor and we are giving to the visitor. Why not focus on creating growth? Why not focus
22:04on creating governance, whereby we can increase the return? And FPIs are very patient investors.
22:11For 17 years, they haven't made any money in China. They are happily invested over there.
22:17So we have to focus on creating growth and governance so that the returns will be
22:23attractive for FPIs to invest. From what I can see from Sameer's reaction,
22:27he is itching to come in and respond to what you are saying.
22:31I was saying, I am 63. I now cannot wait 17 years for my return.
22:37Isliye Sameer Bhai, aap China mein invest nahin karte hain, aap India mein karte hain.
22:40No, no, no, but I am saying that is a bad example.
22:42Sameer Arora in China na. Isliye Sameer Arora China mein paida hi nahin ho sakta.
22:48India mein hi ho sakta hain.
22:49No, no, so the point, may I just summarize. So nobody is saying that you set off, I mean,
22:54a wave short term capital gain, number one. Second is in absolute amount, what Shankar was
23:00saying is right, but it is not going to be made this year. So let us not think today
23:05that somebody is giving up one lakh crores if they give up long term capital gains.
23:10And next year also you are not making one lakh because even if you last four,
23:13five years, the average is some 30, 40 thousand. And then in one year, it's like big.
23:18So you are actually talking about five billion dollars, maybe on a sort of over a cycle.
23:24It is not a big deal to actually set it off for everybody because that is what it was before 2018.
23:31And also, so it was quite OK at that time. And this also, remember, capital gains tax came,
23:37not came in, was removed in lieu of STT. So even from that angle, it's not a big deal.
23:43And I'm not saying I don't expect it to happen. But these are the kind of things that somebody
23:48should think if you want a sharper recovery and therefore moving on with life. Otherwise,
23:53it just takes time to rebuild. And OK, two years more will be wasted of everybody and I will be
23:59still here, hopefully, but. OK, the next question is from my colleague Siddharth.
24:05Well, Rahul, I have something to add to what Sameer said. See, the problem is not that it's
24:15any rocket science to understand that we are an exceptional country by way of taxation.
24:21Like Sameer, I invest globally. There is no capital gains anywhere at all,
24:25I only pay some moderate tax on dividends here and there. But there is no capital gains anywhere
24:30in the world that I invest in. Now, why are we so special that we are levying this? OK,
24:36we are very special except that. Now, the markets have told you, FIS has told you that look,
24:41the returns have fallen from a 10-12% rupee return minus a 15% blended STCG, LTCG,
24:49so it has come down to 10%. From there, you reduce it to 4-5% currency, 5%. US 2-year
24:54treasury is yielding 4.2%. Why should I break my head over this country which thinks that,
25:00you know, some God gives to the world? So, the point is that we are not special. We need to be
25:04in parity with the world, but we are not. But the point is, the policy responses that we have seen
25:10is one of denial. We are not willing to accept that we have a problem. Till you accept it,
25:16there is no solution. The problem is only that, first of all, with some humility, we should
25:22accept that, OK, the FIIs are running away. There is something that we need to address.
25:28Let's go meet them. I tweeted a while back that we can criticise the previous regime a lot,
25:33but they were constantly talking to FIIs. I have seen them, roadshows in the US, roadshows in
25:39Boston, in Singapore, in Bombay, meeting FIIs, asking their concerns. Are we doing enough
25:44outreach to even understand what the problem is? That's what crisis management is all about.
25:49We have a crisis. Let's go out, meet them, get their feedback and then frame policy without any,
25:55if you made a wrong thing, just rewind it. Like you take back things that you do for farmers.
26:01Farmer laws were rescinded and this and that. Why not for investors?
26:06Nilesh bhai, do you want to respond to this, that the government seems to be in denial about
26:10the nature of the crisis, the extent of the crisis and they're trying to portray sab changa si,
26:15whereas sab changa not si. So Rahul bhai, total money taken by FIIs is about $37 billion.
26:23How much they have invested in India? The secondary market listed equity will be about $750
26:30to $800 billion. The FDI is about $500 billion, including the levers and those companies.
26:39And the PE and venture capital is roughly about another $750 to $800 billion.
26:54But at the same time, should we engage with them? Undoubtedly, yes. Why not?
26:59They are investors. They have given us their capital and we must engage with them to figure
27:04out what is the best way forward. But at the same time, giving FDI a preferential treatment
27:11and local investors non-preferential treatment, then where will this end?
27:28There's no end to it. We have to take money on our fundamentals, not on concession.
27:35Sameer wants to respond very briefly.
27:37I was only saying that nobody is saying seriously now that there is a tax,
27:41that it will be waived only for one group. Obviously, that will be very unrealistic.
27:46I think the total amount is not a lot. But anyway, I think we should move on.
27:51It's not happening. So why overanalyze something which is not happening?
27:55This has been going on since 2018. And I only in that conference just presented it because they
28:00asked me, what can government do? I said, this is what they can do.
28:03And I thought of it some five minutes before when they asked me, I'm going to ask you this.
28:10Rahul, you know, frankly, this debate is being framed by some market participants
28:15on the lines of what happened when that retrospective tax amendment happened for
28:19Vodafone and its impact on FDI. Nilesh has, of course, put it in context with numbers.
28:26But broadly speaking, Nilesh, that question to you, actually,
28:32beyond the numbers in terms of FDI pullouts, the fact remains that India is now a less attractive
28:40market for a host of factors vis-a-vis China on the ground of currency, as well as domestic growth.
28:48Do you see some steps required to address those issues rather than the tax issue,
28:56which I personally think will not get rolled back?
29:00Undoubtedly, Siddharth bhai, taxes like allopathic medicine, it will have quick results,
29:07but side effects. Whereas we have to work like Ayurvedic medicine, recovery without side effects.
29:15And the most important thing is freeing up, unburdening our entrepreneur. Today,
29:20ease of doing business is being implemented, but the pace at which it is implemented is very,
29:26very small, very, very slow. The number of compliance burden, regulatory burdens,
29:32which are put on our entrepreneur is reflecting into private investment. How do we unburden our
29:39entrepreneurs so that they can compete with the best in the world? If we can improve ease of doing
29:45business and unburden our entrepreneur, growth can easily increase by half a percent to one percent.
29:53For example, we have seen when the government companies comes in the end of public-private
29:58partnership model, their efficiency improved, whether it is Hindustan Zinc, whether it is
30:03Maruti Suzuki, whether it is Balcon. Now, government officially states that we do not
30:08want to be in the business of running businesses. But the divestment numbers,
30:13despite last five years rally, has been well below target. So, how do we improve ease of doing
30:19business, unlock the capital, improve the efficiency that will attract FDIs over a longer period of time?
30:27Okay, I am going to get Shailendra Bhatnagar, our market shared to ask the next question.
30:31Shailendra. Yeah, Rahul, I just like to make one point in response to what Shankar and Sameer
30:38have been mentioning. You see, the reason why farm laws were taken back was because farmers get a
30:44vote, the FIIs do not. And I think the major issue in India is still overvaluation of this recently
30:54manufactured coffin of the bear market. Yes, the tax issue is one of the nails. But I do not think
31:02so. Taking away this tax issue, you will see markets rising anywhere soon. We were way,
31:07way overvalued over the last five, seven, 10 months or so. Part of that correction is over.
31:13And as Nilesh Bhai would confirm, this is a flow-led sell-off. This has nothing to do with
31:19fundamentals, however weak they might be. Once the FII flow stops in terms of selling,
31:25you will probably see markets flatten out and then maybe start their upward climb or maybe upward
31:31run. Okay. But because we also seem to have here, Shankar Sharma, a situation where after a very
31:38long time, we're now seeing SIPs come down. So new people launching systematic investment plans,
31:44that number is coming down. And that seems quite alarming. The last several years we've seen month
31:48after month the SIP numbers go up. So what's your advice to those watching at this moment? Many of
31:54them are either pulling back or be cutting down on their monthly investments. And that again,
31:59is a self-fulfilling cycle. I mean, the more they pull back, the more the trend accentuates.
32:06So look, I mean, the stock markets are, this is the way the game works, right? And I like I said
32:12that earlier, let them also suffer what we have suffered over 35 years. We have seen these kinds
32:18of situations. The newbies to somehow believe that markets have stopped being cyclical. I've
32:24been lectured to by many small SME investors told that you don't know anything about market,
32:29this time it's different. Then let them suffer, they will have cancellations of SIPs.
32:34Your ability to suffer is much more than the ability of small investors to suffer.
32:41You see, we were also small at some point in time. We became big because we never cried.
32:46We went out, dealt with it, we overcame the odds. These people will need to also do the same thing.
32:52The bloodletting has to happen. It has just begun. It will take a while to be completely
32:57out of the system. I see no reason why anybody should be feeling sorry for the investors who
33:02piled in in the last couple of years. They were coming at pretty much a very elevated level.
33:07They helped nothing but the FBIs get exits. I think 2022 was also a negative year, if I'm not
33:11mistaken, or 23. So it's not only that the negatives happened only in the last four months
33:17time. They've had negative years, even in the last four years of this amazing bull run. Let them,
33:23the new investors also suffer the same pain that we went through. They will become better
33:28if nothing else. So I think this is part of your market journey as an investor.
33:33Sameer, quick point on that. In the larger context, the post-COVID rally and a new equity
33:41culture, especially in freshers into the market that started, has that now come a full circle,
33:48according to you? No, no. But before that, may I say that this is actually helping the newbies,
33:54not just in terms of education that they're getting from the market, but the fact is that
33:58if you're going to invest for 20-30 years, you want the initial years to be low,
34:04because you're accumulating at a fixed pace via an SIP. You don't want that immediately you put
34:10the first 3-4-5 SIPs and suddenly the market is up 20% or whatever. And you're enjoying that on
34:16your 50,000 rupees, you made 10,000 rupees. But from there on, you have to invest and accumulate
34:21units at those levels. Actually, Shankar has not realized, but this is worse for people who are
34:26about to retire, people who are old, who might be thinking that they will get X amount in 3-6
34:31months, and now maybe getting, say, 15% less. So newbies are, A, being taught a lesson,
34:38but not a very serious lesson. Actually, it is good for them.
34:41Okay. Shailendra has a question. Shailendra.
34:44Yeah. Sameer bhai, this is a question aimed at you. You have about several thousand crore rupees
34:49invested via AMC Helios in India. And of course, you also have an overseas fund.
34:55Now, what is the level of cash that you have as of now? And when do you start buying,
35:00as far as the level of the markets is concerned, what would you buy large caps, smalls or mids?
35:07So, you know, right now we have some cash because we've taken a very confused view,
35:11I won't say negative view on Indian IT. And the reason for that is twofold. And we had a lot of
35:17IT stocks. We had, not have. And the reason for that is, A, the attack from AI is very,
35:24very serious. If you look at the three or four pillars of IT, one you can say is very easy low,
35:29you know, low in this thing, customer handling and BPO type. The second was coding. And today
35:35in an article in your online, this thing, the CEO of Inmobi is quoted as saying that they have
35:44removed or are about to remove 60-80% of engineers. And in one year, they would have
35:48removed 100% of the engineers. So the second is coding. And the third is analytics. And in all of
35:54them, basically, the attack is very serious. But the second thing is that in April, when these
35:59companies are supposed to guide, that will be five, seven days after the deadline. So if in March,
36:05they talk to the US clients and say, excuse me, can you please tell us how much orders we are
36:10getting? We don't expect the US companies to be able to say anything to our IT guys, because they
36:17themselves are confused whether what their products will have, whether their input raw material,
36:22everything. It's a total mess for this particular two, three month period. And because of this dual
36:28thing, we have a lot of cash, that cash is basically equal to the IT stocks that we had at
36:34in December and January. So Neeleshwari, last several years, we've seen this trend,
36:40that every month domestic institutional investors have more money to invest, because retail investors
36:45are pumping in more money, they go out and they buy already overvalued stocks. And that's a cycle
36:50which kind of just kept fueling itself the last couple of years. In previous cycles, we saw domestic
36:56investors being smarter than foreign investors, they knew when to get in, they knew when to get
37:00out better than foreign investors who in the Indian markets were oftentimes got flatfooted.
37:04Now, my concern is from a retail investors perspective, they've been pumping money in the
37:09religious belief that Neelesh Shah, Shankar Sharma, Sameer Arora will find some way of making money
37:15for them. And now that belief is being questioned. So that's the challenge. This whole cycle of
37:20pumping in money, which leads to valuations going up further, that's now being upturned. So you've
37:25got a double whammy with the foreign investors having a negative outlook. And these Indian
37:29investors were very confident last several years, suddenly getting rattled.
37:34So Rahul bhai, I don't think so. We have gone and bought overvalued stocks.
37:40If that was the case, our fund should have fallen more than the benchmark index.
37:44Our fund should have delivered lower return than benchmark index, like most foreign counterparts
37:50and Sameer bhai and Shankar bhai will say, most of the global fund managers underperformed their
37:55benchmark indices. But over here, almost all fund managers have started outperforming benchmark
38:01indices in this fall. Because we had bet on horses, not on donkeys. And there was a time when donkeys
38:09were running faster than horses. Now donkeys are falling and horses are not falling. So fund
38:13manager is showing outperformance. Volatility will be there. Rahul bhai, my small gift fund is up
38:21five times since 2020. Yes, it is down 20% from top, but it is five times up for a five-year
38:28investor. So all I expect people to invest for long term have moderated return expectation because
38:35whatever return came in last five years, those kinds of returns are not expected in next five
38:40years. And even today in India, there is a market which has delivered better return than all the
38:45Amazons and Googles and Facebooks and Twitters and Teslas of the world. That's the SME IPO index.
38:53None of the mutual funds have gone and invested a single naya paisa there. Now one can criticize
38:58that we missed making money over there. But we are safe betting upon horses and not donkeys.
39:05So men will be separated from boys. If investors have long term view, and they can give patient
39:12capital, they will still make above insulation return in mutual funds SIP.
39:17Okay, Shailendra has a question for Shankar Sharma.
39:20Hi Shankar, shall we say, would you write off 2025 as a year of flat to negative returns for
39:28Indian markets considered the fact that, you know,
39:30nine years of successive gains in the last four have been phenomenal?
39:37Yeah, like I said, markets are cyclical. We've had a five-year bull market.
39:41We are in the fifth year, I think, in March, March 23, we will have the fifth
39:46anniversary of the bull market. When a bull market reaches fifth year
39:51birth, in birthday, it's close to the death day. So the bull market as it existed,
39:56no longer exists. Now we are going to get a market which is going to be more trading oriented,
40:01we'll get sharp bear market rallies, you know, huge ones. I mean, we can go back to 2008,
40:06it was not like a one way down market. The 2001 bear market was again not,
40:12so we will get those rallies. But point to point, I don't see the indexes returning a lot of money
40:17from a displacement standpoint. In the middle, there'll be amazing places to make money in.
40:23I think also, in the era, the last decade of the 90s, we found some amazing companies, Dr. Reddy,
40:31the whole pharma boom was born then. The whole IT boom was born then. You know,
40:35the HDFC, Banks of the World came into being. This will be the time when fund managers will
40:40need to be extremely hardworking because the days of easy money are over. There will need to be more
40:45bottom up, more picky rather than just bet on the macro. The macro doesn't look great. I mean,
40:50as I just said, I'm very concerned. But that doesn't mean in a country like India, you will
40:54not find micro. We are blessed to have 10,000 companies, good, bad, ugly, you will find enough
40:59to fill a portfolio. That's my way of looking at the next year or two years. But index basis,
41:04I don't see a lot of gains. In fact, I see negative gains.
41:07Let's build on the gadha ghoda analogy. I'll go to Sameer Arora on this first.
41:12Sameer, I don't want to speak particularly about one particular stock, but just broadly speaking,
41:18sectorally, which are the gadhas, which are the ghodas at this moment?
41:22No, I won't say gadha because I used to own some of these two months ago. Right now, I feel that
41:28we have to, it means India has to somehow get through this IT issue because IT is not just
41:36a few stocks. IT drives so many other things in terms of jobs, high end jobs, middle class jobs,
41:43consumer and all that. But IT is being attacked. That is what we are nervous about. But we have
41:48held it for 30 years in between, maybe not for a few years. They are in no way gadhas,
41:53actually, they are the best companies of India. But just too scary right now as to how they will
42:00deal with this in the, say, three, six months or particularly three months right now.
42:06Okay, and the ghodas?
42:08Ghodas, we've had the same old banks and all which haven't particularly been ghodas,
42:13but they haven't fallen in this two, three month phase. And of course, they've been ghoda over the
42:18previous 23, 24 years or whatever, 26 years. And then last two, three years, they were waiting to
42:24do this, which is that not falling is now a big highlight of our life that these banks have not
42:30fallen this year. Let's not. No, no. So Sameer, this reminds me of Hindustan Lever. You know,
42:37in the whole bull market of 2003 to 2007, I don't think it moved by even five rupees.
42:42And then it didn't fall in. And then in the 2008 bear market,
42:47I think one stock that was positive for the year, it was up five rupees for that year.
43:03So yeah, we are seeing the rebirth of them in the HDFC banks and the other
43:08financials. They didn't move up. So what room do they have on the downside?
43:12Siddharth, I just wanted a view on the public sector companies. You know,
43:19they've seen a very, very significant market cap erosion in the past six, seven months.
43:25You know, order book is pretty strong, but execution concerns remain.
43:29Within all that is happening, how do you view public sector enterprises?
43:34So Siddharth, when public sector enterprises, there were many stocks,
43:38the floating stock was very, very low. And because of limited floating stock,
43:43the valuations were sky high. Now, those sky high valuations are finding that there is a
43:50gravitation also. But despite correction, I think they are still trading at a much higher valuation.
43:57I will advise caution over there. Rest of the market where there is enough floating stock,
44:03so market price is discovered through free market mechanism. There you have to take bottom-up stock
44:11calls. We still think there are segments of public sector enterprises like oil marketing
44:18companies which are very, very cheap, but there is always regulatory uncertainty and hence they
44:23may just remain cheap. As Sameerbhai mentioned, some of the PSU banks now look good. Valuations
44:30are cheap. Deposit franchise is strong. NPA pressure is limited. So in public sector enterprises
44:37go on a bottom-up basis where you think there is valuation comfort and there is limited policy
44:43uncertainty. Rahul, just one of the key points that we need to keep in term of overall market
44:50revival. I think a monsoon will be very critical. Second quarter of FY26, so around the festive
44:58season and thereafter is when many market participants and I wonder what the views of
45:02Sameer and Shankar are on that. How significant will the monsoon be in sort of helping reverse
45:09the momentum to some extent? Sameer, maybe you want to come in. As long as monsoon does not
45:14lead to floods like happened last time, which lead to the inability of government to spend on
45:20capex, infra, whatever. Otherwise, yeah, the base effect will work. I think anyway, just because of
45:26the way the markets are falling, either they will fall a little bit more this month, or they would
45:30have sort of been tired out. And then you need a little bit less volatility on Trump policies and
45:38maybe some visibility that things are over. So I think when April guidance is also will start
45:43for IT and other sectors wherever they do give guidance. And then you can not say that suddenly
45:49the market will have a boom. Then you can move on in life.
45:54Shankar, if I may just interject here and add one more element. By many accounts, the RBI was
46:01late in the rate cut cycle. Now, if it decides to catch up, will that also have a positive impact
46:07in your assessment? No, no, I completely disagree that it was late to the rate cut decision. I know
46:16social media, everybody keeps crying for rate cuts, but look at it logically. We have a very
46:22weak currency. On top of that, you're going to, and then you have a large scale outflow of,
46:28you know, and while Nilesh is right on the data front of a 35 billion or something,
46:34the private equity in the VC is not an en masse exit. They have no exit unless the
46:38FBI gives them the exit through the secondary and the primary markets.
46:43So it is not the quantum, it's just the directional outflow of dollars that the
46:49RBI has had to defend. And I do believe the previous RBI governor spent a fair bit of
46:53forex reserves in defending the currency. It's futile against a rampaging dollar.
46:58We have a very weak currency. On top of that, I do a rate cut, you increase inflation,
47:02you decrease the currency. You are between a rock and a hard place. There is no room for a rate cut,
47:09which is why the new governor came in and just did a token 0.25. It is nothing,
47:13it doesn't do anything at all. Because that was an admission that, guys, stop looking for hope
47:20or revival on this side. Look at the fiscal or something else, but this is not going to
47:24come from RBI on the monetary part of it. Very, very straightforward. No chance of a rate cut.
47:28Come to the end of what's been a fascinating conversation. I have just one
47:31very quick round of questions. I want to go to Sameer first on the issue of whether
47:36this threat of reciprocal tariffs is now being factored in. If and when they do get implemented,
47:41what impact do you see on Indian stock market participants?
47:45No, it's not been factored in. Maybe at an aggregate level, yes. But, you know, I think
47:49the issue of India having to cut tax, basically tariffs to bring in, say, Tesla type, would
47:56actually, I think they should actively assist BYD and others to come in and compete with India.
48:02There is no need to protect two or three corporates in the whole of the country and let
48:06everybody else get old technology, buy outdated products or behind technology products to save
48:13one or two corporates. For example, is Maruti considered an Indian company or not? For most
48:18purposes, it is considered an Indian company, even though it is owned, and maybe those guys
48:23get some royalty and some dividends. But it's an Indian company. We should make all these
48:28multinational Indian companies by forcing them to go public in, say, five years, have a partner,
48:35have some localization requirement, have some export commitment. But all that is a negative
48:41for some existing guys, if that happens. Otherwise, it's that broadly will not be
48:46a very serious thing. I think India will be better off than others in the reciprocal business,
48:52because I think the government seems to be willing to do a few deals here and there. And,
48:56you know, for example, in the budget, they already cut tariff on whatever, motorcycles and
49:02then on EV recently and all that. So, that looks like they are willing to do. I mean,
49:06because everybody knows, including the government, that some of our tariffs are
49:10just high for the heck of it. Why do we need 150% tax on bourbon or whiskey or whatever?
49:17I mean, just for the heck of it. There is no real saving to anybody.
49:21Siddharth, I think what will fundamentally change, Rahul, just to take that point forward is,
49:26India now stepping on the gas with three trade agreements, the UK, the European Union and the
49:34US engagement for which P. H. Goel is already on way. I think within the next three months,
49:40if all goes well, three to six months maybe, we will see concrete action. So, 2025,
49:46while it being a year of tepid markets, could be a big bull year when it comes to trade engagement
49:52and new trade pact, which haven't happened for 10, 11 years of the Modi government earlier,
49:56at least in this scale. And that will have a fundamental effect on Indian companies,
50:02including their profitability. Those who have benefited from a tariff moat will come under
50:07pressure. As the point was made, they'll have to sort of pull up their socks. But you would
50:12also see some amount of benefit from a consumption point of view. So, 2025 in headline terms is the
50:18year of trade. Shankar Sharma, we're completely out of time. So, one very quick last question.
50:23If you were, say, 20-30 years before where you are right now in your investment journey,
50:28and you are planning where to invest in this market, what are you telling those
50:33who are watching you at this time, who are rattled, who are concerned? You've given them
50:36the life philosophical gyan ki humne bhi safar ki, aap bhi safar karo. So, outside of that,
50:40realistically speaking, where would you be suggesting to them that they should have their
50:44radars up for? Very simple. Helios mutual fund mein SIP kar rahi hain aur Kotech mutual fund mein
50:53kar rahi hain. Baat kata ho gayi. Straightforward. Aur yeh humare MFD nahi hain. We can't have
51:00anything which ultimately needs to be edited out of the show. That's just said in jest,
51:05lest you think that they're being very jovial and friendly. But there's a lot of
51:10competitiveness and, you know, and vanity and pride as well about who does better in terms
51:16of the returns that they're able to deliver for themselves and for their investors. So,
51:19take that with jest before you take that seriously. So, Shankar Sharma, I know that
51:22you're a little unwell, but despite that, you took out time to join us. So, thank you very much.
51:27Also, Nilesh bhai for joining us on this broadcast and Samir Arora for taking out time and joining us
51:32for this very special conversation I know will be heard and tracked very, very closely. So,
51:36thank you. Since so many people were sending questions that we should do a discussion and
51:40debate on the news track, bring it front and centre and that's exactly what we did.
51:44I don't know whether you've got the answers, but at least have some clarity about how the
51:47big market operators are thinking about the current situation in the markets.