How to invest money in FY25? Samir Bahl explains

“A significant allocation to equities (around 60-70%) is recommended, providing significant opportunity for long-term wealth accumulation,” says Samir Bahl, CEO – Investment Banking, Anand Rathi Advisors.

In an interview with ETMarkets, Bahl said: “To offset the risks associated with the stock market, a balanced portfolio including 15-20% in debt instruments like bonds is prudent along with 15% in commodities and alternative investments like gold and real estate for diversification,” Edited excerpts:



We are in the last month of FY24. How do you see the trajectory of markets in the next financial year?

Samir Bahl: As we assess the current state of the Indian capital markets, it is important to contextualize the historic performance of the NIFTY and the overall boom India is currently experiencing.

Fiscal 24 saw the Indian markets outperform most of its global peers with the NIFTY providing a return of ~26% so far and showing no signs of slowing down in Q4.

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I believe this year we may see a continued rise until May with potential healthy corrections in early June post the run we will witness — prior to the general elections.

How are you placed in your portfolio?

Samir Bahl: In light of the current market dynamics and the significant growth we’re experiencing in India, I’ve adopted a more bullish approach to managing my investment portfolio.

This involves factoring in the upticks we are currently seeing while also mitigating the risks of potential downturns in the near future. Gradually liquidating a portion of the portfolio is crucial.

It allows profit realization while keeping the door open for reinvestment of those profits when the market do see a minor correction.

This strategy safeguards a certain percentage of gains, crucial in volatile markets, and presents a significant arbitrage opportunity when prices inevitably adjust.

How should investors be positioned for FY25 – what should be the ideal asset allocation if the person is in the age bracket of 30-40 years?

Samir Bahl: For investors between the ages of 30-40, an ideal asset allocation for FY 25 would involve prioritizing equities to best capitalize on the current boom we are witnessing.

A significant allocation to equities (around 60-70%) is recommended, providing significant opportunity for long term wealth accumulation.

Additionally, to offset the risks associated with the stock market, a balanced portfolio including 15-20% in debt instruments like bonds is prudent along with 15% in commodities and alternative investments like gold and real estate for diversification.

Balance assets should be held as cash reserves for liquidity purposes and for unforeseen rainy days.

This strategy ensures a balanced approach, maximizing growth while managing risk in the dynamic market environment of FY25.

Oil & gas, Energy and PSU Index rose more than 30% in the last 3 months – what is driving the rally?

Samir Bahl: The recent rise in the Oil & Gas, Energy, and PSU Index, with gains of over 30% in the past three months, can be attributed to a couple of key factors.

India is currently the third largest consumer of energy and oil globally and is witnessing significant demand growth for energy and utilities, with sectors like Electricity, Gas, and Water Supply growing at a solid 9% in Q3 FY24.

This demand growth also comes from the growth of complimentary industries such as Infrastructure, logistics, and manufacturing.

Secondly, our finance minister Nirmala Sitharaman made clear statements ensuring that the government was not dismantling the PSUs but lending them strength through a concrete policy framework to bring more capital funds and professionalism.

This made the market develop a bullish outlook on PSU companies which caused PSU indexes to rise drastically.

Will Dividend-paying stocks be a better play to beat volatility in FY25? What percentage of the portfolio should be placed in dividend stocks?

Samir Bahl: Allocation within equities in FY25 will inherently come down to individual investors and their personal risk tolerance.

Dividend-paying stocks in India tend to be safer bets with stocks such as Vedanta, Coal India and ITC leading the way. Investors looking for supplemental income and assured short-term payouts should pivot into dividend-paying stocks for FY 25, thereby mitigating some degree of market risk post the phenomenal market performance in FY 24.

An allocation of 20%-25% in dividend-paying stocks can offset losses from growth stocks during market downturns and provide a layer of stability to an investor’s portfolio.

What role will debt play in the next few years – do you see debt portfolios gaining popularity in retail, and HNI circles?

Samir Bahl: With investors making large gains through equities across FY24, debt investments will now prove a prudent allocation of those gains across the next few years. As a result, capital markets will have the limelight but investors seeking less risky investment options will adopt debt instruments across retail and HNI circles.

Debt instruments such as Bond funds will typically give a 6.5%-7% interest rate to an investor, which while being lower than the rate of return for Equities, will provide a source of relatively risk-free passive income.

We have seen many SME IPOs hitting D-Street compared to the mainboard so far in 2024 – how are you evaluating this trend – is it a good sign or a sign of caution?

Samir Bahl: SME IPOs have garnered significant attention in India in recent years as we can see that in year 2023, 179 SME IPOs were launched whereas only 58 mainboard IPOs were launched during the same period.

This presents a significant opportunity for small businesses to raise capital and expand, contributing to the growth of business in India, particularly during the peak of the ‘Make in India’ initiative.

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)

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