'Stay on the crease': Indian equity markets set to dominate this decade, says Enam Holdings' Manish Chokhani

Manish Chokhani, Director, Enam Holdings, retains a positive view on the domestic equity markets, despite concerns about small-cap exuberance. He believes the market still has significant growth potential, underpinned by India’s demographic advantages, economic trends and rising domestic flows. 

Sharing his views at the India Today Conclave 2024, the market veteran shared a historical perspective, explaining that since the 1970s, global capital has flowed into different markets each decade, from commodities to emerging markets to technology.

He said that India is now poised to be the epicentre of this decade due to its strong demographic profile and the self-inflicted challenges China faces. He pointed to the role of domestic investors, especially young Indians, entering the markets through mutual funds and SIPs (Systematic Investment Plans), creating a strong foundation for long-term market growth.

He further said that there is some exuberance in small caps and the SME exchange, 75% of India’s market capitalisation lies in large-cap stocks. “The market doesn’t make a top based on excesses in quadrant four [small caps],” he explained, adding that foreign inflows have yet to fully materialise, indicating more growth ahead. 

On a year-to-date basis, foreign institutional investors have poured around Rs 91,700 crore in the domestic equity markets till September 26, 2024, while domestic institutional investors (DIIs) bought shares worth Rs 3.25 lakh crore during the same period.

The benchmark equity index BSE Sensex has soared nearly 19%, or 13,595 points, to 85,836 on September 26, 2024, against 72,240 on December 29 last year.

Chokhani also said that while Indian households still hold over $2 trillion in gold, the younger generation is moving away from traditional assets like gold and increasingly turning to equities, recognising the potential of rising cash flows and wealth creation through businesses. “The young generation doesn't want gold. 

They want to hold equities because that's a rising cash flow stream,” Chokhani added.

The market watcher also added that the fun of investing in India is that there are just so many businesses. “Unlike other markets, where they are largely property and finance companies, in India you can go sector after sector and find leadership companies. Some of the mid-caps of today will become large caps of tomorrow because the sectors themselves are slated to grow,” he said adding it is entrepreneurial trends which will get you there.
“Just keep on that wicket and stay on the crease,” he advised new investors.