Navneet Munot, the MD & CEO of HDFC Asset Management Company, believes that the upcoming mega Jio Platforms Initial Public Offering highlights the depth and potential of India's capital markets. Munot, who manages assets worth over $660 million, believes that the potential of the capital markets is reflected through such IPOs, even as foreign investors continue to remain net sellers in the capital markets, and global uncertainties keep sentiments in check."I hope that more and more entrepreneurs look at the long-term potential of India, innovate, and invest more because the markets are giving them an opportunity to raise capital," Munot told CNBC-TV18 in an interaction on Monday, October 19.
The Mega Jio Platforms IPO opens for subscription on Wednesday, October 21. The ₹30,213 crore IPO is a complete fresh issue and does not include any offer for sale component. This is the biggest IPO in India's capital markets history. Navneet Munot On India's Taxation StructureMunot also expressed optimism that the government will review its taxation structure to attract foreign capital amid a global liquidity drain by the artificial intelligence sector."You ask me about would government be open on the taxation.
This is a pain point for the foreign investors, and I am sure the government would be engaging deeply with them," he said. Last week, Finance Minister Nirmala Sitharaman had highlighted that she will be open to hearing views on both LTCG and STT, something that had triggered a sharp rally on the Indian Equity markets.
Munot pointed out that foreign investors hold less than 1% of global capital in India. "All they want is as far as taxation is concerned, is simplicity, transparency and predictability," he said, adding that recent interactions have given foreign portfolio investors hope for a tax structure review.
Against this volatile backdrop, Munot noted a complete reset in the global economy, moving away from a prolonged period of low rates and stimulus. He highlighted that the AI trade is absorbing massive amounts of capital from both equity and debt markets.
The sector is projected to borrow more than $200 billion this year, up from $20 billion two years ago. Despite strong domestic growth, positive corporate commentary, and upcoming demand stimulus from the 8th Pay Commission, India remains capital deficient.
Addressing potential changes, Munot stated that a minor hike in the Securities Transaction Tax would not deter long-term equity investors, provided there is growth and a reasonable tax regime. However, he noted that the current system is challenging for global open-ended funds, which must pay taxes on rupee gains even when currency depreciation erodes returns for their end investors.
He also called for a review of fixed-income taxation, as recent changes have reduced allocations to long-term bond mutual funds. Rating his confidence in government action at a six or seven out of ten, Munot praised policymakers for ensuring macroeconomic stability.
He emphasised that with over 13 crore unique investors in the stock market and 6 crore in mutual funds, market sentiment directly impacts consumption and long-term investment potential. For the entire discussion, watch the accompanying videoDisclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management.
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