Veteran banker and National Bank for Financing Infrastructure and Development Chairman K.V. Kamath has said everything is going right for India at present and it is a good “opportunity centre” for young entrepreneurs.
“India is an opportunity centre so concentrate on Indian opportunities. There may be some constraints but look at India as the primary focus area. I don’t think you will find any better opportunity anywhere else in the world at this point of time,” says Kamath, a Padma Bhushan awardee, in a chat with Shashwat Goenka, the Vice Chairman of RP-Sanjiv Goenka Group, at Fortune India 40Under40 Awards event in Mumbai today.
Kamath, who held various coveted positions, including chief of the New Development Bank of BRICS countries, chairman of Infosys, and non-executive chairman of ICICI Bank, says war situation in Europe, inflation cycle, and interest rate hike are some of the red flags for global growth. “In the case of India, not following a path in which you use all your learnings is the only risk we have. Otherwise, we are on a great path for a long period of time and we should reach the aspiration that we have set.”
He advised young entrepreneurs to look for trends and connect the dots to draw insights. “One needs to find dots and figure out how to connect them. And see if there are any pointers which can be pulled into what you are doing. This never ends and even today this will go on in terms of what is happening around,” explains Kamath, who is credited for the growth of ICICI Bank into the one of the biggest private sector lender.
On business ideas, Kamath says there is always a risk when young entrepreneurs take a completely different path to become successful. “If you identify an opportunity and others are not seeing it. There is always a risk but take that path.”
On the overvaluation of stock markets in India, Kamath says the rule is simple; follow “buy or be aware” before investing in a company. “I would not concentrate too much on stock market valuations rather look at underlying growth trends. Is that growth going to sustain the company that you want to invest in?
On the recent surge in capital raising in the Indian capital market, which is at all-time high, Kamath says if there is an opportunity one should raise funds. “As a CEO, you need to take shareholders' interest into account but having that cushion is always good.”
Replying to a question on debt to equity ratio in funding, the veteran banker says, “Debt is a double-edged sword. When the going is good it can generate high returns, but in case of reverse, you can fall on the sharp side of it. The 1:2 ratio of debt-to-equity is the mantra which most businesses followed till the mid-1990s. In today’s world, businesses should be cautious in taking debts and equity should be the primary focus.”
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