'Nowhere near bubble territory': Uday Kotak says enough checks in place after Sebi's 'froth' warning

While acknowledging 'a little froth', veteran banker Uday Kotak said that there is currently no indication of a bubble in the market, adding that there were enough checks and balances in place to prevent any major issues. 

Kotak was addressing SEBI-NISM Research Conference. "There may be a little froth, it could be a little bubbly but not out of control," Kotak said. His comments come after Securities and Exchange Board of India (Sebi) chairperson Madhabi Puri Buch raised concerns over frothiness in small- and mid-cap stocks.

Buch said there are pockets of "froth" in small and mid-cap stocks which appear like "irrational exuberance", adding that Sebi had evidence, pointing to signs of "price manipulation" in the small and medium enterprises (SME) segment.

"It may not be appropriate to allow the bubble to keep building, because when it bursts, they impact the investors adversely. That is not a good thing," Buch had said. Kotak noted a significant growth in the futures and options category, indicating market dynamism but stopping short of suggesting an impending bubble.

"The time has come for us to foresee over the next 10-20 years for India's growth and development is how can India look at improving its position on the currency side to get larger and larger positioning as a potential currency of trade on its capacity," Kotak said.

Kotak also underscored the imporatance of crypto in future. "Future competition for markets is coming from cryptos," he said, adding that he forsees a revolution in capital markets from badla system to F&Os. "Investors look at crypto as a hedge," he added.