Nilesh Shah, MD, Kotak Mahindra AMC
Shah told businessline that a mutual fund would not invest in a sector or a company where they expect losses.
He was referring to the high valuation of the Meesho IPO and MFs’ scramble to invest in it, which had the market experts on social media calling for regulatory intervention.
The Meesho IPO, priced between ₹105 and ₹111 per share, values the company at ₹50,096 crore at the top end.
“There were a lot of social media comments about one stock, but 140 institutional investors invested in that. Does a ‘Tom, Dick and Harry’ on social media have more knowledge or 140 institutional investors?” he asks.
Forget institutional investors, a seasoned investor like Radhakishan Damani, has invested in that stock.
“Now, whom should I give more importance to? Someone like Damani, who has proven himself. Or a guy with 10 followers on social media complaining,” he asked.
Speaking about anchor allotment, he said people invest based on their research, and of this, some will be right and some may go wrong. As long as market forces prevail, it should be fine, said Shah, who is also a part-time member of the Prime Minister’s Economic Advisory Council (EAC-PM).
“Please remember that anchor allotment comes with a lock-in. A fund manager is not going to take that risk until he believes there is an opportunity to make money,” said Shah.
On MFs providing lucrative exits to early investors in IPOs, he said mutual funds invest based on business prospects and its value. “How much money an existing investor has made or lost, I do not care. I am bothered only about my return,” he said.
However, he said: “I am a little bit worried about a few financial investors walking away with a huge profit without adding any value to business”.
Maruti Suzuki has created the automobile industry in India and if Suzuki monetizes, that is understandable, but there are many exits in which foreign companies take thousands of crores out without doing any value add, he said.
“Just because you were lucky to be in some place at the right time, you are today reaping benefits. We should not allow it. Exit to foreigners should be in proportion to the value add,” said Shah.
“Our net FPI has become zero and $80 billion has gone out from our residence and promoter exits. If this is allowed unabated, tomorrow, that number could be much higher. We have to think about it. I do not have solutions. I know there is a problem,” he said.
Published on December 4, 2025
