interview | Sensex can reach 1,00,000 in three years: Rakesh Mehta
Mumbai: After the recession in the first quarter of the year 2023, now again a new round of boom has started in the Indian Stock Market and the Sensex has crossed the five-month high of 61,000 points. Investment guru CA Rakesh Mehta believes that today India is a shining star amidst the recessionary environment in the world, which has the highest growth rate. Due to which India is emerging as the hottest investment destination. If political stability remains in the country, then the growth momentum will continue and the Sensex can reach the figure of 1,00,000 in the next three years. In this era of boom, if investors want to create wealth, then they have to have a long term vision. All these aspects were discussed in detail with Rakesh Mehta, Founder Chairman of leading broking and investment firm Mehta Equities Ltd., with Vishnu Bhardwaj, Business Editor. Mehta Equities’ wealth management service with an investor base of over 50,000 has generated over 13 percent annualized returns over the past five years and the Alternative Investment Fund’s 11 consumer fintech investments have turned four into unicorns and the fund is valued at 3.5%. It has increased more than three times in a year. The returns of other healthcare funds have also been five times. Here are the key points of the discussion:- At what level can Sensex reach in the next 2-3 years considering India’s growth rate? Today, where the fear of recession is haunting the big countries of the world, India’s growth is accelerating. The biggest proof of this is that the GST collection reached a record high level of Rs 1.87 lakh crore in the first month of the new financial year itself, April. This shows that due to the untiring efforts of the government, growth is accelerating in every sector. The central government did 3 big things for economic development. Aadhaar Card, Online Payment System (NPCI) and India Capex Plan. Which is having a tremendous impact. The growth of the three sectors with maximum employment, real estate, IT and textiles, is accelerating. The defense sector has undergone a metamorphosis. India has become an exporter country from arms importer. Sugar industry has turned into energy industry. The auto industry has started running again. In this way the whole economy is booming. This is the reason why Foreign Institutional Investors (FII) have again become buyers after heavy selling of Rs 2 lakh crore in the last 6 months. If political stability prevails, India’s growth story will continue and Sensex can reach 1,00,000 mark in next three years. What should a retail investor do to create wealth in this booming phase? If a retail investor wants to take advantage of this boom phase and create wealth by earning in the market, then he has to invest in quality stocks by doing research or taking expert advice. Also, a long term view has to be taken as ups and downs are common in this market. There can also be loss on investment without research or advice. Global or domestic developments may lead to some downside in the short term, but it will be temporary. The Indian market is no longer dependent on foreign investors. From October to March, foreign investors sold a record amount of Rs 2 lakh crore, but there was not much recession in the Indian market. Now again foreign investors have become buyers after seeing our rapid growth. The youth of the country (employees and businessmen) have started increasing their investment rapidly. That is why demat accounts have crossed 10 crores, which were only 3 crores three years ago. Which sectors are looking more attractive for investment? Growth is accelerating in almost all industry sectors due to the heavy expenditure on development by the central government, the policy of reducing import dependence and promoting indigenous production (self-reliant India). By the way, Defence, Railways, Capital Goods, Consumer Durables, Auto, Steel, Cement, Retail and Sugar industries are getting maximum benefits. The facility management business has also started growing rapidly. Also read What will be the effect of the decisions taken by the regulator ‘SEBI’ in the interest of investors on the market? Just as the Reserve Bank of India (RBI) has made the country’s banking sector the strongest in the world with its strict rules, in the same way ‘SEBI’ (SEBI) has made the Indian market completely safe by making new strict rules. ‘SEBI’ knows that some retail investors often get trapped in greed and invest anywhere and end up in loss. Therefore, the regulator has made drastic reforms in the last one year to protect the retail investor and imposed stricter margin rules. Short selling has been made difficult. In this way betting has been controlled. The new rules will increase the depth of the market and will only be beneficial. IPOs are still coming at very high prices, is that true? No. It is such that ‘SEBI’ has brought complete transparency in the IPO market from its side. It has been made mandatory to give all the risk factors and disclosures. Good governance has been done. Due to the open market policy, SEBI has left the job of fixing the IPO price to the merchant bankers and promoters. Therefore, merchant bankers and promoters need to think that they should keep a reasonable price in the IPO, so that investor confidence is maintained and the market can grow healthy. Investors should also research that company before investing in every IPO to protect their capital and consider investing according to their risk appetite.