Gujaratis have always been keen and savvy investors.
Six per cent of the National Stock Exchange’s and 12.2 per cent of BSE’s cash segment turnover from April to December 2012 came from Ahmedabad, Vadodara and Rajkot. The combined turnover of BSE and NSE during this period exceeded Rs 23.83 lakh crore.
Fourteen of Gujarat’s cities feature in the top 120 cities that invest in mutual funds. These cities contribute 5.33 per cent of the mutual fund industry’s assets under management of over Rs 8.25 lakh crore as on April 30, 2013. Not to forget the Gujarati investors from Mumbai.
What attracts the Gujarati to equity? It is an affinity for trading and money that separates Gujjus from most other Indians. Arun Kejriwal, Founder, KRIS Research, says: “When it comes to equity they understand the market implications much better than anybody else. Therefore, by default it could be said that equity is in their blood.”
Vijay Maniar, owner, Abhay Sales Corporation and a distributor of food and beverages, agrees, “We Gujaratis have this habit of investing half of our monthly income for the future. As most of us are businessmen, we have a better idea of industry and are able to pick stocks better than the salaried class. Not to forget that we are also good at numbers.”
Key growth driver
The lure of making a quick buck and the ability to take risks beyond their capacity also seem to drive Gujaratis into equities. “It is for this reason that many families have one person taking up salaried employment while the others do business,” says Ajay Dave of Ahmedabad.
Jagdeep Grewal, Vice-President Research, of Ahmedabad-based brokerage Kunvarji Finstock, points out that Gujaratis invest in financial instruments as that reduces their dependence on some one else when it comes to earning money. They are very systematic and judiciously take and avoid risks. For every speculative bet they also have a hedged position and indulge in arbitrage to make small but risk-free gains.
This helps them make money in double quick time using financial leverage. Gujaratis exemplify best financial entrepreneurship where money begets money.