Dhakka khana zaroori hai! FROM SCARCITY TO ABUNDANCE

Vikaas M Sachdeva, Co-Chair of the IVCA CAT III Council, joined veteran journalist Vivek Law on the Simple Hai! show to discuss the evolution of Indian investment.

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The transformative journey of the Indian investment sector, the rise of mutual funds and the explosive growth of alternative investments-these formed the crux of the conversation. The mutual fund industry has seen tremendous growth over the years and Sachdeva broke down this evolution into three key stages.

The Guaranteed Returns Era

This early stage featured products like UTI and Morgan Stanley. While people invested and made money, there was a fundamental lack of understanding; mutual funds were often equated with stocks. This led to information asymmetry, with even “grey market premiums” running on NFOs (New Fund Offers).

Around 1997-98, institutions like Birla, ICICI, and HDFC began educating investors on mutual fund concepts. This period saw significant regulatory and taxation changes.

Alignment & Campaign Success

The current phase, starting around 2016, marked the alignment of product, regulation and distribution structures. A major trigger was the "Mutual Funds Sahi Hai" campaign, which, despite initial resistance, saw phenomenal success, leading to a six fold growth in the industry in just ten years. At that time, there were approximately 10 crore SIP accounts, a stark contrast to the late 1990s when collecting a single Rs 5,000 application involved significant physical effort.

The Investor Maturity Curve