Union Minister Piyush Goyal recently addressed the Association of Mutual Funds of India (AMFI) Summit, shedding light on the current state of the equity market. Goyal expressed his views on the benchmark Nifty 50’s valuation, deeming it as “decent and reasonable” at 19 times of FY26 earnings. Despite acknowledging the potential for further corrections in the market, Goyal emphasized the significance of maintaining a forward P/E ratio of 19 for a developing nation like India.
Concerns arose as Goyal highlighted the exorbitant valuations of smaller companies, driven by a prolonged bull market. He cited examples of businesses with inflated price-to-earning ratios, cautioning against the sustainability of such valuations. Goyal stressed the need to prevent artificial run-ups in the market and urged AMFI to guide small investors effectively during market corrections. Emphasizing the importance of responsible investing, Goyal called on mutual fund houses to prioritize investor protection over mere returns.
Throughout his address, Goyal commended domestic investors for their steadfast participation in the market, particularly through systematic investment plans. He emphasized the pivotal role of domestic investors in ensuring that foreign entities do not overshadow the Indian market. Additionally, SEBI whole-time member Amarjeet Singh highlighted the potential for mutual funds to influence corporate governance positively, underscoring AMFI’s role in fostering industry growth and development.
In a separate context, Goyal hinted at the progress of free trade agreements with various countries, indicating that one agreement is near finalization while two others are in the pipeline. This development signals India’s commitment to fostering international trade relations for mutual benefit, showcasing the government’s proactive stance on economic cooperation.
As the equity market continues to navigate through fluctuations and regulatory changes, Goyal’s insights serve as a reminder of the importance of sustainable investing practices and investor protection. Through collaborative efforts between regulatory bodies, industry stakeholders, and investors, the Indian market can strive towards stability and growth in the long term.
