With Rs 3 crore in hand, where should I invest to guarantee profit? This was the pressing question rapper Badshah posed to Zerodha's co-founder Nikhil Kamath in a recent podcast.
Known for his sharp investment acumen, Kamath pointed to the energy transition sector as a key area of opportunity.
He sees a global shift from fossil fuels to renewable energy as a monumental change that presents significant investment potential. "Energy transition is such a big thing in the world; most wars in our history have been fought over it," Kamath said.
He suggested that investments in electric vehicle companies, battery manufacturers, and solar energy firms could be particularly lucrative. According to Kamath, while this sector might not be as glamorous as others, it offers substantial profitability, especially with government incentives pushing the transition to renewable energy.
Kamath also advised aspiring entrepreneurs to avoid overcrowded industries and focus on sectors with substantial growth potential over the next decade.
He explained that while passionate individuals often enter these fields, financial returns are not always guaranteed, giving example of Bollywood, where investments often fail to yield profits.
He pointed out that people often fund films to get close to popular celebrities, but it’s like a funnel where money flows in and burns out.
“Pick a sector that you believe will be five to ten times larger in ten years than it is today,” he suggested.
Kamath emphasized the importance of thorough research before launching a business and cautioned against following trends or investing in industries driven solely by passion.
He shared his thoughts on patience and adaptability in business, noting that while patience is crucial, entrepreneurs should not wait too long for a failing project to succeed. “In my experience, if something doesn’t work from the very beginning, it likely never will,” he stated, urging quick action to abandon unviable projects and conserve resources.
The conversation also touched on Kamath’s broader investment strategies. He expressed a passion for supporting Indian brands with a patriotic narrative, especially those with international potential. However, Kamath acknowledged the challenge of high valuations in the current market, making him cautious about new investments until valuations become more reasonable.