Market Correction Key To Unlocking Foreign Investment, Says Manish Chokhani

The futures and options segment has surged to 150% of the gross domestic product in terms of market capitalisation, according to Manish Chokhani, director at Enam Holdings Pvt. There is froth in small-cap stocks, he emphasised, while highlighting the positive aspect that large-cap stocks are not excessively overpriced.

There is a need for the market to correct, whether through time or valuation adjustment, he told NDTV Profit. He predicted a significant inflow of foreign investment once this correction is complete.

"You'll certainly be surprised by the number of strong foreign inflows that are waiting to come in," Chokhani said, indicating a potential surge in capital once the market stabilises.

India, already the world’s fourth-largest economy and on track to become the third-largest, still faces challenges rooted in outdated paradigms, according to Chokhani.

He pointed out that despite holding $675 billion in reserves, which amounts to 15–16% of GDP, the country is not making the most of this capital. "To have that kind of money locked up, really not giving us returns other than that one lakh dividend, is a travesty," he said.

The rupee will strengthen in the coming years, a marked shift from its performance over the past two decades, he said. He also forecasted an upsurge in hard assets, particularly precious metals like gold, silver, and uranium.

The government needs to implement key policy reforms, including those in foreign exchange, labour, and agriculture, to accelerate economic growth while maintaining low inflation, Chokhani said. "If we start getting this economy running a lot faster with lower inflation, then the deluge of money that is going to come to India from overseas cannot be quantified," he said.

Chokhani commended the government's approach to controlling oil prices, particularly in light of India's involvement in the recent Russia crisis. He highlighted the importance of avoiding a repeat of the economic hit from soaring oil prices seen in the past, especially with global oil prices currently at $80 a barrel amid growing geopolitical tensions predicted by the United States among Israel and Iran.