Billionaire investor Rakesh Jhunjhunwala is upbeat about annual equity returns from India stock in coming years which he terms could be five percentage points on top of the economic growth of 7%-10%.
Jhunjhunwala is counting on India’s potential for long-term growth and political stability to further fuel gains in the $3 trillion stock market, already hitting record after record this year.
His bets are on banks and health insurance—boosted by the pandemic—to a broad consumer rally on the back of prime minister Narendra Modi’s policies to give every Indian a home and access to clean water.
“We are in the middle of a bull phase which will last for a very, very long time,” Mr Jhunjhunwala said in an interview earlier this month. “India will also look lucrative when the U.S. Federal Reserve begins to withdraw stimulus, but there will be short-term disruptions.”
“The Reserve Bank and others were worried even when the Nifty was at 8,000 points,” Jhunjhunwala said in a video interview on June 3, referring to one of the country’s key gauges that’s now heading toward an unprecedented 16,000 level after having almost doubled since the end of 2015.
Only two events would be significant enough to make him wary about India’s prospects, he said. Political instability — which he says is unlikely for now given his expectation that PM Modi will stay in power at least through 2029 — and any antagonism from India’s nuclear-armed arch-rival Pakistan.
New money will only fuel further gains in key indexes, Jhunjhunwala said. The Reserve Bank of India sees the region’s third-largest economy expanding 9.5% in the year that began April 1.
Mr Jhunjhunwala has an estimated net worth of $4.6 billion, according to Forbes.
