1 month ago
Over the next five-seven years, investment in the stock market and fixed deposits will almost be equal. India is in the middle of a huge savings allocation change, the Motilal Oswal Group chairman says
March 26, 2024 / 01:10 PM IST
Raamdeo Agrawal, Chairman and Co-founder of Motilal Oswal Financial Services
Corrections are an essential part of the stock market and every stock and sector has to correct after a small or big rally, Motilal Oswal Group chairman Raamdeo Agrawal has said.
Talking to CNBC-TV18, Agrawal said although investors are worried over corrections, what they experience is "quotational losses" and not actual losses.
Quotational loss is a temporary decline in the market value of an investment, often due to short-term factors such as market sentiment, economic conditions, or geopolitical events. It does not necessarily reflect a deterioration in the intrinsic value of the investment.
On the selloff in the mid and smallcap stocks in the past two weeks, Agrawal said valuations in the broader market were frothy. He identified retail investing as a strong driver of the market.
Motilal Oswal now gets 40-50 lakh customers every month, he said. "This is a record from 35-40 million customers in 2020, we reached 15 crore customers in February." He expects the brokerage to have 30 crore customers over the next three-four years.
Also Read | Capital markets will be the theme for the next 10 years: Raamdeo Agrawal of Motilal Oswal
The pace of new customer addition is accelerating, Agrawal said. In the next five-seven years, the investment in the stock market and fixed deposits would almost be equal. "We are in the middle of a huge savings allocation change in the economy and the economy has to perform as well," he said.
"In 2023-24, we collected 17 lakh crore of fixed deposits and in the same time the stock market must have received 5 lakh crore," Agrawal said.
A boom in equity has a wealth effect and leads to a boosts consumption and tax collections. The wealth effect also leads to a boom in real estate, he said.
Agrawal sees the Indian economy growing at 7-8 percent, which is ahead of economists' expectations.
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