‘Giving Financial Advice Is Not Like Selling Lipstick’: Radhika Gupta, MD, CEO, Edelweiss

Indian financial ecosystem is on firm ground and participation is increasing from various income groups. re are opportunities galore and need to be on right side of caution.

Seasoned investor, Rhika Gupta, MD & CEO, Edelweiss Asset Manment shared her insights in an exclusive interview.

Republic: Tell us about changing landscape of asset manment in India as you see it today. 

I think it's a great time to be in asset manment business. As India is getting younger and more prosperous, more people are turning to financial instruments. More people have faith in equity story in India, and y're choosing mutual funds and retail mutual funds as asset manment vehicles. 

Many of us would kw that today retail investor savings into SIPs are about $2 billion or Rs 17,000 crore a month. And increasingly, re is more awareness about power of regulated asset manment products like mutual funds as a vehicle of choice for consumers. So, I don't think re's been a better time to be in asset manment industry than re is today.

Republic: You are a seasoned investor. You've been in field for a while. What have been your key leership techniques which have helped you tide over a dece of being in business? 

I think leership is something that classroom can teach you. You really learn it on job, you really learn it in crisis, and you really learn it from people. I think a leer must be honest and accountable to her stakeholders. And I think that is my primary lesson from leership. So don't carry lo alone. 

When you are in a crisis, when you need help, be honest with your board, be honest with your investors. Be honest with your customers, our investors, in our case, and with your team. And I think that really carries you a long way. 

Focus is extremely important. So, temptation in business to do ten things is very common, especially in a market as booming as India, but staying relentlessly focused on a few sets of things and delivering excellence in m. And I think third quality is resilience. Leership should have leers should have a certain amount of optimism and resilience. 

I think I learned most as a CEO in periods like 2018 and 19, which were much tougher for business, where people are coming and asking you those tough questions, and you really must gar all your chutzpah and tell people to move ahe. So, I think a certain amount of resilience and optimism. 

Republic: Where does opportunity lie for growth? Do you have a couple of tips for our viewers?

I think my primary tip is to have faith in Indian story and Indian equities. I think over next dece, you will see India grow into a five and $10 trillion ecomy from two and a half thousand to $5,000 GDP per capita and you will see great companies come out of India. 

You alrey have about 800 companies that are more than 3,000 crores in size and you will see many and as an investor invest in Indian equities and benefit from India's ecomic growth. We are very lucky to be investing in a market like India were doing something very simple such as a SIP into Indian equities, you are earning 12-13 per cent a year. 

Even global investors today are looking at Indian equities. I mean, I've never h more questions about investing in India from foreign investors than I have today. So as Indian investors, we perhaps are in luckiest place. My or vice is to start early, ditch cynicism and really start your investing journey early and take vice from right people as you embark on this journey. 

Republic: Coming to vice, re is a lot of dialogue exchanges and speculations going around finfluencers. government is t happy with m. As a serious contributor to this , what is your take on vice which is coming off Instagram or or social media platforms? 

You ask a great question. Firstly, I think social media is a very powerful channel. I use it myself. But it has to be and it is voice of young people, but it has to be used to give a responsible mess. 

I'm very happy to see action that government and regulators are taking on influencers. And I believe two problems need to be dressed. One is as far as financial vice, it's t like selling lipstick. It is serious business and it needs to be given by people who are qualified. 

body can go out re and give medical vice for free. And same is true. So you can't be taking vice from a random person. Anyone who gives financial vice has to be registered, has to be regulated, has to be qualified to do it. second is when you are receiving vice from someone you should kw why y're giving you that vice and what incentives behind that vice are. And if we can make sure se two things are disclosed.

Social media is used to give good messs about having right expectations. Being a long-term investor is very good. But social media used to give wrong sensational messs and lure people into quick get-rich schemes. 

Republic: You just recently expressed your views on cryptocurrencies and said that anything which is unregulated is t worth your time or investment you can elaborate on that? 

It's very simple. I believe any investor should invest in an asset class that is regulated by government and where you have a recourse if something goes wrong. India has seen so many equivalents of Chit funds and Scams and XYZ where crores of investors have lost money just by investing in something unregulated. 

If your government has t regulated it, it's t for you. Because one day re's going to be a problem and you will have an issue. And this is t something I'm saying today, this is something I've been saying in context of cryptocurrency for last couple of years, thankfully. And by way, India has got ten or h at some point ten crore cryptocurrency users. 

We have four crore mutual fund investors to put this into perspective. So it is a problem. I'm gl. Over last year, some of this has been dressed in conversation with government on tax and regulation in cryptocurrency. And I think some of recent global events around Binance and FTX just underscore what? So you kw, even as we speak, small caps are sort of grabbing. 

Republic: Do you think this outperformance is going to last or is it just a ripple effect of how markets are performing in general? 

So I think small caps are a little misunderstood. In 1998, about 25 years ago, our market was very small and re was a limited section of meaningful companies. aver market cap of a large cap company was three 4000 crores. 

Today, as I said, you have 800 companies with a market cap above 3,000 crores. A small-cap company on aver has a market cap of 12,000 crores. So this belief that mid and small-cap companies are small untested business models that are poor corporate governance is a myth. 

In fact, in many sectors like diagstics chemicals, and capital goods, your market leers are in mid and small-cap . So I think one, we have to change lens. 

w, I'm t saying go out and buy small caps and rush to buy m, but I think answer is a middle path. If you have to build a portfolio for future, it has to be a combination of large, mid and small. And we forget that while small caps have run up, se companies are also delivering earnings. So small caps in technical terms are at midpoint of a valuation cycle, early point of an earnings cycle. 

To an ordinary investor, my only mess is don't invest in small caps because you see a 30 per cent last year return. That's a recipe for disaster. Invest because you believe in companies and segments and invest for seven to ten years kwing that you will have a year of losing 50 per cent. n go ahe and make investment. Have cour, but also be sure and have realistic expectations that are t anchored to last year because that's when things go wrong. 

This brings me to next question, which is that if you want to have a sustainable pattern in investing, what should it be? And be a responsible investor, what are key qualities that a person should have? 

I think sustainable investing, and I'm t talking about things like ESG here, I think sustainable investing for an individual is really about a set of goals and investing consistently. Investors who have been in this business for 20 years and still we see professional investing investors do a really b job at timing market, most people do. 

easiest approach is to automate decision-making. One of reasons I think SIPS are so good is because every month you get a salary and just like you pay tax, investment is also a tax. You just decide to go ahe and invest, and it is a habit and it's a habit that is repeatable and automatic and you don't wake up every morning and think. So I think sustainable investing is about habits and it's about goals. 

re’s a big buzz about se big numbers coming up. Sensex is to be at one lakh Nifty is going to cross 20,000. All se golden numbers which are coming up what is your take? 

I mean this is just a natural growth that people should because I don't see that re should be a huge rise and n fall or something. I think it's going to be an eventual growth for corporate market and capital market. I find this buzz about numbers funny. I mean it's like why do you celebrate a century in cricket? Like why is guy who earned 100, much better than guy who was on 99? I mean one lakh on Sensex and all se things are just numbers. 

fact is I think over last 20 years Indian equities have grown at 12 per cent and this is a period when we've h COVID, we've h financial crisis, we h tech bust and so much has happened and w we are sitting at a point where private sector capex is happening. You have so much positive reform that is happening in this country your demographics are favourable so I look at story that Indian equities can deliver. You will have se milestones; you will have many or milestones. I also echo what you said that this journey is t a 12 per cent a-year journey you will have years of tremendous rockiness. Right w. re's a lot of smiling everywhere. I go because markets have been green, but equity markets are plus 20 and -20 that's also reality of business that we are in. Thanks for highlighting that, Rhika. 

Republic: And n Finally, my favourite question what does it take to Sustain as a woman leer in financial world, what does it take to sustain? 

I think a lot of resilience, a tremendous amount of thick skin. Because for all my career, people have asked me, what are terrible things that have happened to you as a woman? Or what are challenges? And every one of us has se stories. But reality is you develop a thick skin, and you focus on your work and you move on. 

I also think it takes a certain amount of ambition, and I think Indian women don't vocalise ir ambition eugh. It takes you to tell yourself that, I can do this and do it really well, and to ask for those big opportunities that often your male colleagues are very good at asking for and say, if re's an opportunity, I want to do it, and I can damn do it well. So it takes a certain amount of ambition and asking and n putting your he down and working and believing that. 

“Kuch to log kahenge, logon ka kaam hai kehna”

As long as y're talking about you, you must be doing something good. So be responsible, be ambitious.