Passive investing style to gain currency in capital markets, says RSec CEO

KR Srivats New Delhi | Updated on February 13, 2020

Expects Nifty50 to scale 13,000 levels by March-end 2021

Reliance Securities, a subsidiary of Reliance Capital, is ‘cautiously optimistic’ on the stock markets in the next one year and expects Nifty50 to scale up to 13,000 levels by end March 2021, Lav Chaturvedi, Executive Director & CEO, has said.

“We expect the Nifty50 index to grow about 10 per cent in fiscal 2020-21 in line with the 10 per cent nominal GDP growth that the government had forecasted the for next fiscal. We are not bullish,” Chaturvedi told BusinessLine.

Chaturvedi also said that the stock market’s upward trajectory in the coming days is likely to be “broad-based” going forward with high quality mid-caps’ participation too and not confined to only the select frontline big caps that had given good market returns so far this fiscal.

“We are of the view that there are still selective options in the mid-cap space that could turn into multibaggers and create an alpha. But alpha is going to get more and more difficult. Passive investing style is going to be the future of capital markets,” he said.

Chaturvedi, who was on the board of Reliance Securities for five years before taking up an executive role as CEO, sees “financialisation of savings in the capital market” going up in coming years as Indian economy marches towards a $5-trillion GDP-mark by 2025.

10% growth possible

He expressed confidence over the economy growing 10 per cent (on a nominal GDP growth) in 2020-21 as projected by the government. “There should be no question mark on India’s potential. The potential is humongous. India is in a sweet spot where potential is huge, but actual implementation and output is a challenge,” Chaturvedi said.

If India has to reach $5-trillion economy mark, it has to be public investment complemented by private investments, he said.

Meanwhile, Chaturvedi said that Reliance Securities aspires to emerge as an industry leader in the capital markets space both on business-to-consumer and business-to-business sides. “We want to achieve this in the next one-to-two years. We are already a strong B2C player. Our aspiration may look ambitious. We are working on it to get to the top bracket in the industry league and various strategies are being implemented,” he said.

Published on February 13, 2020

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