Highlights from FLAME University's first Investment Conference - India as a destination for investment : Challenges & Opportunities

The Finance Department at FLAME University organized the FLAME Investment Conference on Saturday, 11th March, 2017 at their beautiful campus in Pune.

The main topic of discussion of the conference was, “India as a Destination for investment : Challenges and Opportunities.”

The objective of the conference was to bring together investors and analysts and explore one of the most relevant topics in the investment world.

The conference assumed greater significance in the current context of volatility in the markets and game changing events like Brexit, Trump as President, Make in India, Swachh Bharat, Demonetization, GST, Union Budget, State elections, etc.

Six eminent speakers shared their views related to the theme of the conference.

Mr. Kuntal Shah, Founding Partner, SageOne Investment Advisors LLP, talked about Indian equities as an asset class and on an investor’s philosophy behind building a portfolio. He spoke of equity as being a superior asset class as it yields highest returns. He also advised young investors to hold equities for a period of 10 years as it would, in most cases, have a probability of almost zero loss.

Talking about investing philosophy, he said that humans have not yet completely developed their “Monkey Brains” and tend to have a “Herd Mentality”. He spoke about human emotions swaying like a  pendulum, from the state of euphoria to panic, with regards to equity prices.

In the end, he specifically recommended young students and investors to read to the extent of 300-350 pages per day. This session was moderated by Mr. Neeraj Marathe, independent investor.

Mr. Kunj Bansal, ED & CIO, Centrum Wealth Management, talked about a very specific topic, “Equity – Should One Sell”.  At first he shared his views about the holding period for equities during which he mentioned that one should hold a stock until there is a fundamental change in its nature or the stock has grown to an extent where it will no longer grow faster than the economy.

There after, he discussed various reasons on why one should sell a stock as detailed below:

1. Erosion of cash flow visibility.
2.  A sharp drop in genuine demand for products/services.
3. Removal of unrealistic subsidies.
4. Inability to command pricing power.
5. Technological obsolescence.
6. End of product life cycle.
7. Loss of competitive edge.

Lastly, he recommended that individuals have to make their own assumptions and take their own decisions with regards to equities and adopt different methods for valuation for different companies. This session was moderated by Mr. Prashant Shah, Business Analyst at SunGard.

Mr. Alok Agarwal, CFO, Reliance Industries Limited, discussed, “Where should Indian’s Invest”. He talked about the macro economic situation of India, wherein he said that India’s growth needs financing. He also said that investments in India are low when taken as a percentage of GDP. Additionally, he mentioned, capital investments eventually find their own level; they need fiscal incentives.

He concluded his talk by quoting Mr. John. F. Kennedy, “Ask not what the country has done for you, but what have you done for your country”, and highlighted the following:

1. India is the only country in the world with an increasing workforce year over year.
2. It is easy to sell investments but difficult for promoters to sell businesses.

Mr. Sampath Reddy, CIO, Bajaj Allianz Life Insurance, spoke about factors driving economic growth and how India can be a destination for investments. The four major factors that he highlighted were:

1. Labour – India has a good labour pool but not sufficiently talented.
2. Capital – Key reason for economic growth.
3. Technology
4. Public Infrastructure Investment

While discussing the challenges, he spoke of the need for higher capital expenditure and why lower capital investment is a constraint to growth. Further talking about opportunities, he mentioned that India is attracting large foreign investment due to its high growth potential and also India has a healthier savings rate compared to most developed economies. In his talk, he also touched upon various other topics such as:

1. Banks being dominant part of financial savings.
2. Fund-raising process and attracting more IPOs.
3. Market earnings growth.
4. Privatization of ports and airports.
5. Dedicated freight corridors.

This session was moderated by Mr. Gaurav Sanghvi, Senior Manager, Bajaj Allianz Life Insurance.

Mr. Bharat Phatak, Promoter, Wealth Managers India Private Ltd., in a very simplistic manner explained and talked about, “Why Invest in India?” and also underlined that people have no alternative other than investing in India. He talked about various topics such as:

1. Frugal innovation resulting in lower cost.
2. Growth of entrepreneurship in India.
3. Respect for capital – people will use resources prudently when they are less.
4. GDP doubling - leading to creation of transaction super highways.
5. Discretionary consumption
6. Demographics and Liquidity Super Cycle.
7. Low Equity Ownership.
8. Real Returns on Fixed Deposits and Equity.

He concluded the discussion by addressing the current situation of IPOs in India. This session was moderated by Mr. Ajit Khasnis, Owner, Wealth Managers India Private Ltd.

Mr. Karthik Venkatesan, Manager, Indirect Tax, PWC India, talked about the most debated topic, Goods & Service Tax (GST). He talked about what GST is and how it will be computed and executed. He also discussed the benefits of GST, such as:

1. Single tax implying lesser complications.
2. Increase of demand possibly because of reduction in taxes.
3. Ease of doing business in India.
4. Increased set-offs or credit availability with respect to input and output taxation.
5. No cascading effect – No tax on tax.
6. Employment opportunities due to creation of demand.
7. Increase in GDP and reduction in inflation.

He also talked about various challenges and opportunities that are associated with GST. And the concept of anti-profiteering. His talk concluded by answering various queries on GST wherein he answered questions related to division of taxes among various states, impact on e-commerce, the agriculture list under GST and is GST – 1 Tax, 1 Market, 1 Country.

The investment conference concluded with a vote of thanks by Prof. Salim Shamsher, where he quoted Peter Drucker – “Finance is the life blood of business”.

It was an outstanding opportunity to equip and enlighten people around the conference’s theme. The goal was to bring together bright minds to give talks that are idea-focused, on the subject of finance and investments, to foster learning, inspiration and wonder – and provoke conversations that matter.