Contrary to what people believe, there is a bull market going on amid a meaningful correction in the broader market, specifically in the mid and small-cap segments. The Indian stock market has seen strong growth in the wake of COVID-19, except for the last 12-15 months, said market veteran Madhusudan Kela on Friday, December 12.
Kela was speaking at the Mint Annual BFSI Conclave 2025. Commenting on the recent underperformance of the market, Kela underscored that markets over a period of time give average returns. If there have been exceptional periods of returns, the market will find a reason to take a breather.
But Kela emphasised that over a longer period of time, equities will continue to be one of the best asset classes to invest in India.
"As we have seen 14-15% compounding for the last 25 years, I don't see any reason for that not to continue for the next 15 years," said Kela.
Market rewards conviction
Kela said over the last 25 years, the market has rewarded those who stayed convinced in the Indian story and did not get perturbed with one or two-year returns here and there.
"Even great investors like Rakesh Jhunjhunwala made money because he kept faith in the Indian stock market and remained invested," said Kela.
There have been pockets of years over the last 25 years when the returns were oversized.
"There were outsized returns between 2003 to 2008. Plus, the last five years from the COVID crash, except the last 12 months, were really exceptional. If you want me to single out one period out of the last 25 years, then I would say this post-COVID period was the best. At the bottom of COVID low, our market capitalisation was $1.2 trillion, which is now close $5 trillion," Kela said.
The art of making money is to find the right sectors and the right companies within those sectors.
"If you are able to identify the right sector and, within that, the right companies, then you can make outsized returns," said Kela.
"The Indian market has always been a bottom-up story, and the people who have succeeded here are not the ones watching where the Nifty is headed, but the ones who spot companies with tremendous potential and put disproportionate effort into understanding those businesses or sectors early on. But more important than identifying them early is having done enough research to hold on to those stories even after they rise 100–300%," Kela said.
Cryptocurrency: Key lesson for investors
While speaking about crypto investing, Kela admitted, “I must honestly, candidly admit that I'm not invested in crypto.”
He was quick to add that he should have at least evaluated the space. “Forget after evaluation — if we did not participate, that was fine,” he said, adding, “But we did not even evaluate.”
Reflecting on the mindset back then, he said, “Humko laga yeh kya pata yeh coin ka kya value hoga” (We thought, who knows what value this coin will really have).
But he noted that the reality is starkly different today; crypto has grown into a trillion-dollar industry. So, while he didn’t allocate money to it, the takeaway for investors is clear: one should never dismiss any new asset class outright, he explained.
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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
