Nilesh Shah says 3Gs will make stock investors bet on India, likes two sectoral themes

Market veteran Nilesh Shah says India offers the best growth among peers, superior governance standards and is focusing on green transformation, with one of the lowest per capital emission of carbon. He calls this combination GGG or 3Gs (growth, governance and green) and believes this would make investors buy India story going ahead. In an exclusive interview to Business Today TV, Shah said whether investors buy India stocks today or at a lower levels is a matter of valuations debate but they need to buy India growth story from a longer term perspective.

"Like any other market, there would be ups and downs. In any correction, investors should be a buyer of Indian equities," he said. Data compiled by depository NSDL suggests foreign portfolio investors have bought domestic equities to the tune of Rs 1,31,419 crore in 2023 so far.  On the other hand, domestic institutional investors (DIIs) have been net buyers of stocks to the tune of Rs 1,00,273.69 crore year-to-date, data compiled from corporate database AceEquity suggests.       

The Managing Director at Kotak Mahindra Asset Management Company said his fund house remains fully invested. He said one should buy quality companies, businesses with some moat and run by managements that have vision and capabilities. "Most importantly, they need to be respecting governance," Shah said.

Shah said manufacturing in India is a good theme to bet upon, noting that many global companies want to diversify their supply base out of China.  Indian companies, which operate in local market and have capacity to become a part of global supply chain will do extremely well, Shah said.

Shah also likes banking and financial services companies. He said financial services generally grow faster than nominal GDP growth. "In India, we are at a stage where deposit and credit growth are healthy and non-performing assets are at decadal low levels." The strength of the Indian banking sector can be judged from the fact that a small Mumbai-based bank SVC Co-operative Bank had to announce that the SVB crisis had impacted a US bank Silicon Valley Bank, not the domestic bank, he noted.

"When even a small bank in India does not get impacted a big bank's failure in the US, it shows how good are our banking system is," Shah said.

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