Now Reading: Indian investments too concentrated in few sectors: Finance official
-
01
Indian investments too concentrated in few sectors: Finance official
Alok Tiwari, Joint Secretary in the Department of Economic Affairs, said Tuesday that stock market investments in India are too concentrated in a handful of sectors and regions, leaving many promising areas starved of capital. Speaking at the FICCI Capital Market event in Mumbai, Tiwari urged investors to take a more realistic approach to risk assessment and called for policy changes to promote broader diversification.
Tiwari noted that investors have either systematically overestimated risks in certain sectors or failed to develop financial instruments to manage them. Drawing on his experience with the International Finance Corporation, he cited how global investors stayed away from parts of Africa due to inflated fears of default, missing profitable opportunities.
The joint secretary called for developing more investment avenues and financial products to channel capital into underserved sectors. His remarks come as India's equity markets have seen record retail participation but remain heavily tilted toward financial and technology stocks.
Indian Opinion Analysis
Alok Tiwari's remarks signal the finance ministry's growing unease with India's equity market lopsidedness. The concern is not new: Sebi and the RBI have periodically flagged concentration risk, but a joint secretary level official publicly naming it is rare. The data backs his point: Nifty 50 is heavily tilted toward financials and IT, while manufacturing, agriculture, and eastern states see minimal institutional flows. If unchecked, this imbalance could inflate asset bubbles in overheated sectors and starve others of capital just when production-linked incentive schemes need private investment. The next concrete test will be the monthly Sebi mutual fund data for August, due in September, to see whether sectoral flows shifted after this speech.
Source: thehindu.com
This story was synthesised by AI from the source linked above. Methodology and corrections.
