India will give birth to Morgan Stanley, Merrill Lynch, JPMorgans in the coming years: Raamdeo Agrawal, Motilal Oswal group

Raamdeo Agrawal, the Chairman of Motilal Oswal group is of the view that India will give birth to many JPMorgans, Morgan Stanleys, Merrill Lynches in the coming years. In an interview with ET Now’s Nikunj Dalmia, Raamdeo Agrawal said that India will see many Asset Management Companies (AUMs) emerging in the next few years.

“In the last 25 years, total savings in the Indian economy was $10-12 trillion. But in the next 25 years, it is going to be $100 to $150 trillion and it is going to hit us every day,” he was quoted as saying. “I would think by the 10th or 12th year it will be $5-6 trillion of savings per year,” he added.

According to Raamdeo Agrawal, India will see “a lot more money coming into the financial markets and that is going to give birth to larger AMCs.” “We are going to give birth to Morgan Stanley, Merrill Lynch, a big JPMorgan or big asset management company out of India with a serious scale. So, I see that part to be very exciting,” he said.

Asked about which end of the market is expected to trade significantly higher in the next 5-6 years, Agrawal believes capital markets will see huge activity. He is of the view that all participants in this sector are asset-light and experiencing substantial growth. Recent results show impressive increases of 38% to 100%, driven by rising volumes and the asset-light nature of the market, which leads to operating leverage, he explained.

Agrawal also noted that there is a noticeable shift from fixed income to financial products. “We accrue about Rs 17-18 lakh crore of fixed deposits in banks and only Rs 4-5 lakh crore in the stock market, if at all that number is right. So, this is too imbalanced. My sense is, incrementally, that 17-18 might not come down, they will keep on growing at 8-10% but the growth in the financial market numbers will be far higher, maybe 20%, 25% and so 5 lakh crores will go to maybe 6.5, 7 lakh crore next year,” he said.

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