, Jhunjhunwala’s Rare Enterprises was not a publicly traded entity and the two men had opposing views on aviation. Jhunjhunwala’s enthusiasm for the sector was just coming to life; he died a week after the maiden flight of his budget carrier Akasa Air.
India’s financial community is losing a giant figure just as its stock market seems to be coming of age. Share prices have been relatively unmoved as foreign institutional investors, who own roughly one fifth of the market, dumped a net $25 billion of stock this year on the back of war and U.S. interest rate hikes. India’s benchmark Sensex is up 2% in the year to date in local currency and down less than 5% in U.S.
Jhunjhunwala led the way for Indians who are now enthusiastically buying into the country’s long-term growth potential through “systematic investment plans”. There is a flood of domestic liquidity. Household money in mutual funds amounts to $260 billion, a more than 60% jump in the three years to September 2021, and is about 10% of GDP, per Reserve Bank of India data.
There is reason to be nervous, however. As equity gains prominence alongside gold and property as a top place for ordinary folks to park savings, India’s premium valuation to emerging markets is creeping up. The MSCI India index is trading at 21 times forward earnings, almost twice the level of the MSCI Emerging Markets. A persistently high oil price and slowdown in global growth is yet to fully play out for a state that is a net importer of crude.