Tag: Nilesh Shah

‘Kya Lena Chahiye?’: Kotak AMC CEO Nilesh Shah’s playful take on ‘where to invest’ will leave you amused

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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It’s quite common for investors to look for the right investment instruments, and a question that they often confront is ‘what to buy’, which literally indicates ‘where to invest’. Recently, market veteran and CEO of Kotak Mahindra Asset Management Company (AMC), Nilesh Shah, was also asked about this common dilemma of investors at a panel discussion organised by CNBCT-V18 and his quirky response left the audience amused.

On being asked about his opinion and advice on what funds to buy—‘Kya Lena Chahiye?’ in Hindi, which means ‘what to take’—Shah was seen playfully responding that instead of him giving advice on what to buy, he takes advice.

He said that his cousins often suggest picking certain mutual funds as their value would go up. Shah added that the value of the suggested mutual funds really goes up.

While revealing his funny side, the ace market observer said that he is actually at the receiving end instead of giving advice to others. Shah added that he is confident that most people have made far more money and profits than his funds have made. He commented that instead of giving people advice on which funds to buy, he will gladly take their advice.

‘Kya lena chahiye?’

Here’s what market veteran & Kotak Mahindra AMC’s CEO Nilesh Shah has to say @LIC_HFL @clubjolies @ShereenBhan @_prashantnair#IndiaExchange #TheDecadalDividend #CNBCTV18 @ICICIPruMF pic.twitter.com/1wsF0CwMDj

— CNBC-TV18 (@CNBCTV18News) April 4, 2024

The discussion took place at the India Exchange Summit conducted on Thursday, April 4, in Mumbai.

At the same conference, Shah was seen injecting a touch of fun into discussions on how to play the market, drawing an analogy to Wednesday evening’s explosive batting display from Kolkata Knight Riders’ (KKR) star batsman Sunil Narine who made 85 off 39 balls against Delhi Capitals, as Shah urged investors to approach the Indian markets with agility and flair.

The MD also went ahead adding his little witty philosophy, saying, “God exists, and he or she is an Indian,” citing how oil prices continue to be in double digits in India despite global tensions.

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Kotak AMC’s Nilesh Shah: ‘I will prove that God exists and he or she is an Indian’

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Kotak Mahindra Asset Management Company’s Managing Director Nilesh Shah injected a touch of whimsy into discussions on how to play the market during the India Exchange Summit in Mumbai on Thursday, April 4.

Drawing an analogy to Wednesday evening’s explosive batting display from Kolkata Knight Riders’ (KKR) star batsman Sunil Narine who made 85 off 39 balls against Delhi Capitals, Shah urged investors to approach the Indian markets with agility and flair.

Not just that, Shah added a dash of playful philosophy to drive home his point: “God exists, and he or she is an Indian.”

Known for his astute observations on financial markets and economic trends, Shah’s remark added a dash of humour and creativity to the panel discussion on navigating the complexities of the Indian market.

In what appears to be a ‘divine favour’ for India, Shah highlighted the peculiar resilience of oil prices amidst tumultuous global events like the Israel-Hamas conflict and the Russia-Ukraine war to further support his viewpoint.

“Look at oil prices. Israel-Hamas war; oil production cut by Saudi Arabia and Russia; Russia Ukraine war; and the Red Sea disturbance, oil should have been in triple digits. God blessed us, and it is still in double digits,” said Shah.

“….God seems to be Indian,” says @NileshShah68, Managing Director of Kotak Mahindra AMC, citing how oil prices continue to be in double digits in India despite global tensions. #IndiaExchange #Indian #oil #India #GlobalTensions @LIC_HFL @clubjolies pic.twitter.com/M1e9BI3cHG

— CNBC-TV18 (@CNBCTV18News) April 4, 2024

During his keynote address at the summit, Citigroup’s Chief Economist for India, Samiran Chakraborty, also explained the intricate relationship between oil prices and India’s macroeconomic indicators. Chakraborty elucidated that even a modest 10% increase in oil prices could trigger a 15 basis point decline in India’s GDP growth and a 30 basis point surge in inflation. Additionally, such price hikes could exacerbate India’s current account deficit by approximately 0.4% of GDP.

To further substantiate his perspective, Shah said that just three months ago, the US Federal Reserve was advocating “higher for longer” but the Fed chairman is now hinting at a potential shift towards rate cuts.

Likewise, the Bharatiya Janata Party’s defeat in the Karnataka assembly elections created doubts in investors’ minds, but “today we are talking about ‘abki baar 400 paar’,” said Shah.

On the monsoon front, from last year’s below-average rainfall, we are looking at the prospect of a more favourable scenario due to La Nina, the ace fund manager said.

Economic indicators also look more positive, said Shah. “Look at the GDP growth number. We started at 6%, and we are ending the year at 8%. We do go wrong on such estimates, but not by a 25% margin.”

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Kotak AMC’s Nilesh Shah believes mutual fund is the right option to choose

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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As per Nilesh Shah, Managing Director (MD) at Kotak Mahindra AMC, mutual fund (MF) is the right option to choose as the dice is equally in favour of the distributor, manufacturer and investor. While a mutual fund distributor facilitates buying and selling for investors, a manufacturer pools money from investors and invests it in securities such as stocks, bonds, and short-term debt. Consequently, investors benefit when the returns are decent.

Also, in the case of mutual funds, the Securities and Exchange Board of India (Sebi) is already coming out with several provisions for the benefit of the overall industry.

Shah believes that the regulator will do everything further to expand the mutual fund industry and support its growth so that MF houses can continue to provide financial freedom to every Indian.

While comparing MFs to National Pension System (NPS) model, Shah said the dice is loaded in favour of investors with very low operating expenses and the manufacturer or the distributor does not get rewarded for their efforts.

“Despite giving tax incentives, the total asset under management (AUM) in NPS is less than Rs 60,000 crore from non-committed subscribers like government employees,” Shah said while talking exclusively with CNBC-TV18.

Currently, a charge equal to 0.10 percent of the contribution amount is levied on all NPS contributions with Rs 10 as the minimum charge and Rs 10,000 as the maximum charge per transaction. This is charged over and above the payment gateway charges to make online NPS contributions.

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On insurance, Shah said the dice is loaded in favour of the distributor and manufacturer only. As a result, investors have to bear higher costs.

On the total expense ratio (TER) changes, Shah said that as an industry they have shared the feedback with Sebi.

Sebi allows mutual funds to charge investors certain operating expenses for managing mutual fund schemes. These expenses are collectively referred to as TER.

Sebi is now reportedly considering bringing in changes and standardising a uniform TER across mutual fund schemes in a bid to prevent agents from misleading investors.

“We are trying our best to optimise our costs and share the burden with our partners. There will be cost sharing between distributors and manufacturers of products,” Shah told CNBC-TV18.

ALSO READ | Key trends from March AMFI data: Equity MF inflows at 1-year high, SIP flows scale new peak and more

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Budget 2023 | Alchemy Capital’s Hiren Ved stresses on the need for stable tax regime

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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As the countdown to Budget 2023 begins, expectations from all sectors have started to come to the light. While sharing thoughts on the current state of the Indian economy and the impact of tax policies on international investment, Hiren Ved, CEO, Director and CIO at Alchemy Capital, stressed on the need for a stable tax regime in order to attract and retain international investment.

In an interview with CNBC-TV18, Ved emphasized the importance of tax regime stability in sending a positive signal to the international investor community. He noted that while a change in interest rates may be problematic, a change in tenure may be received better by the market.

Ved also pointed out that the market is a mechanism that discounts both good and bad news, and any tax rate change will ultimately be digested by the market.

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Nilesh Shah, MD of Kotak Mahindra AMC also spoke with CNBC-TV18 about the potential benefits of SME listing taxation. Shah believes that this approach will lead to further savings for businesses and investors alike.

In addition to the financial benefits, Shah also suggests that SME listing taxation could be used to plug loopholes in various financial instruments. By closing these loopholes, the government could effectively reduce ethical tax loophole reduction and create a more equitable system for all.

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Despite the potential benefits, Shah acknowledges that implementing SME listing taxation will not be without its challenges. However, he believes that the long-term benefits make it worth striving for.

Shah suggests that the government should take a proactive approach in working with SMEs to understand their needs and concerns and to find ways to implement SME listing taxation in a way that is fair and beneficial for all parties involved.

For the entire discussion, watch the accompanying video

Catch the latest stock market updates with CNBCTV18.com’s blog

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Veranda Learning to acquire JK Shah Education, wants to expand to 400 locations

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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[wealthdesk shortname=”Veranda Learn” isinid=”INE0IQ001011″ bseid=”543514″ nseid=”VERANDA” sector=”Educational Institutions” exchange=”nse”]

Edtech firm Veranda Learning Solutions said it has signed a definitive agreement for the acquisition of JK Shah Education through its subsidiary Veranda XL Learning Solutions for Rs 338 crore. The entire transaction will be funded through a combination of debt and equity.

“The equity component will be Rs 200 crore. This is part of the fundraise that the company just completed a few days ago. The balance is coming from debt,” Kalpathi S Suresh, Chairman and ED at Veranda Learning Solutions told CNBC-TV18.

JK Shah Classes has a strong track record of producing 1,870 CA rankers since 2001 and some of their notable alumni include Kumar Mangalam Birla, Commerce Minister Piyush Goyal and Nilesh Shah of Kotak Mahindra AMC.

Suresh said Veranda is aligning with JK Shah to be the accelerator and the enabler of their plans. The plan is to expand JK Shah from the current 68 locations where it exists to 350-400 locations in India over the next three years, he told CNBC-TV18.

“Make them as big as they are in Maharashtra, in the top 15 states in the country. The second one is to make the best online CA platform in India,” he added.

The third area of focus will be to extend JK Shah’s content and expertise of dominance in the CA education industry from company secretary to cost accountant to CPA, to possibly B.Com and M.Com supplementary education, he said.

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For 2021-2022 fiscal, JK Shah Education’s margins were about Rs 30 crore, and for FY23, it is expected to clock about Rs 35 crore. JK Shah Education business is a zero-debt business and has got Rs 70 crore cash on its books.

For the full interview, watch the accompanying video

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

One of the country’s biggest fund manager advises investors to buy the dips

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Nilesh Shah, one of the country’s biggest fund manager and the managing director of Kotak Mahindra Asset Management, said buying the dips is the best strategy in the Indian markets. There can be near-term challenges, but India will become the third largest economy by 2030, Shah told CNBC-TV18 in an exclusive chat.

By buying dips, Shah meant that investors should buy stocks when their prices are very low.

When stock markets fall considerably, the prices of most stocks drop and, hence, are available at far lower prices than earlier. Even blue-chip stocks are available at lower prices, and thus it gives a choice to investors to choose from a wider range of stocks.

Buying the dip is best suited for long-term investors as they can enter certain stocks at lower prices and book profits as soon as the market jumps back.

Shah further said that  India would outperform, but margins may taper down.

“On a near-term basis, India is expensive. But on a five-year basis, the market is cheap,” he said.

A look at market performance

In the past eight sessions, Nifty50 has been down over 6 percent. On a year-to-date (YTD) basis, Indian markets (S&P BSE Sensex) have been flat primarily due to the major correction seen during the beginning of this calendar year.

According to a Morgan Stanley report, the monetary policy tightening in the US and strength in the dollar could continue to be a source of volatility for Indian equities in the coming months.

Sensex, Nifty 50, Nifty Bank and Nifty Midcap 100’s performance on Thursday:

So, what should investors buy?

Shah said that small and midcap IT companies had run ahead of fundamentals. He thinks the next six months is a good time to start accumulating IT companies.

Here’s a look at the performance of the Nifty IT index on Thursday:

About Kotak Mahindra AMC

Kotak Mutual Fund was established in December 1998 and is a wholly-owned subsidiary of Kotak Mahindra Bank. Kotak Mahindra Asset Management Company (KMAMC) is the asset management company for Kotak Mahindra Mutual Fund.

It offers a wide range of mutual fund schemes across equity, debt and hybrid categories along with the fund of fund schemes and exchange-traded funds.

Here’s how some of the top Kotak Mahindra AMC’s funds have performed in the last 1-year:

(Source: Moneycontrol)

According to AMFI, the average assets under management (AUM) of the Indian mutual fund industry for August 2022 stood at Rs 39,53,423 crore. AUM of the Indian MF industry, as on August 31, 2022, stood at Rs 39,33,878 crore.

The total number of accounts (or folios as per mutual fund parlance) as on August 31, 2022, stood at 136.5 million, while the number of folios under Equity, Hybrid and Solution Oriented Schemes, wherein the maximum investment is from the retail segment, stood at about 108.9 million.

Indian MFs have currently about 57.2 million SIP accounts through which investors regularly invest in Indian MF schemes.

Details of new SIPs registered and discontinued during FY 22-23 are as under : (SIP count in lakh):

(Source: AMFI)

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Here is why Nilesh Shah is bullish on banking stocks but cautious on the IT sector

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Nilesh Shah, Managing Director, Kotak Mahindra AMC, on Wednesday said that he has been bullish on the banking space due to the flows into the sector and going forward, “there will be higher yields on the portfolio”.

“The real challenge for banking was not fundamental but from a flow point of view as most foreign portfolio investors were very large owners of banks, they had made a lot of money on these banks over the years and they were constantly selling. Slowly and steadily, the supply got absorbed as domestic investors kept on buying,” Shah said in an interview with CNBC-TV18.

Among the positive aspects are margins going up as a result of an increase in the interest rates while treasury losses have already been booked in the June 2022 quarter.

“Put all these things together, along with the consolidation happening in business, from a fundamental point of view, the banking sector looks good,” he said.

In the last one month, Nifty Bank has risen 9 percent as compared to the Nifty’s gains of 8 percent during the period.

Also Read: India’s banking sector sees the best summer in 12 years

India’s largest lender State Bank of India (SBI) on Monday said that it would benefit from improving margin due to a lag in deposit rate hike even as lending rates see a quicker transmission with an increase in the policy rate by RBI.

“All said and done, in the rising interest rate scenario, there is always a lag effect when it comes to the deposits and to that extent, the banks will certainly be benefiting from the situation,” SBI Chairman Dinesh Kumar Khara said in an interview with CNBC-TV18.

On IT sector, Shah said that one will have to “look at the valuation and bottom-up story”. According to him, IT still remains in an accumulation zone and one will have to select large-cap companies to build position during this phase.

He believes one will have to be prepared for extreme volatility in the new-age business companies.

“We are also learning how to value these companies. Every quarter these companies also evolve. There is a path to profitability but every quarter there will be adjustments. We have kept some positions in new-age companies, more from a learning point of view and over a period of time, we will be able to evaluate these companies in a far better manner like we value traditional companies,” said Shah.

One will have to pick the winner and cannot be sitting with the losers, he added.

Talking about inflation, Shah said that inflationary issues globally are leading to reduction in consumption but added that purchasing power in India is higher now as compared to the COVID-19 period.

“We do expect local consumption, albeit a little bit subdued, to slowly and steadily pick up with good monsoon and good farm income whereas global, led by Europe consumption, could be sluggish,” he said.

For the full interview, watch the accompanying video

Catch the latest stock market updates with CNBCTV18.com’s blog

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3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Correction in midcap IT provides a good entry point: Nilesh Shah

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Nilesh Shah of Envision Capital views the recent correction in the midcap IT space as a good opportunity to enter, especially to investors who didn’t have a good measure of investment in IT. In an interview to CNBC-TV18, he said: “Some of the Tier-II companies, which essentially are doing extreme cutting edge work, will see higher growth rates over the course of the next 2-3 years.”

His remarks come at a time when the IT sector has taken a backseat in 2022 so far, after outperforming the market for much of 2021.

One sector that has largely remained insulated from the fallout from the COVID-19 pandemic is the IT space. It has only grown exponentially, as companies spearheaded the much-needed scale-up while riding the digital wave.

The current quarterly earnings season has been a mixed bag for the sector, with IT behemoths like TCS, Infosys and HCL Tech largely exceeding Street expectations on the revenue front. However, margins felt squeezed for most of the companies owing to wage inflation and attrition.

However, this hasn’t deterred Shah the slightest from the IT space. He is of the view that the sector looks promising for the next 2-3 years. “Maybe 2-3 quarters will still continue to be challenging for the IT pack,” he added.

Catch latest stock market updates with CNBCTV18.com’s blog

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow