“There is no problem in being a cult but as long as they (market participants) are educated, if they have some experience,” Kedia said. “If they are just going to come and do only Satta (Gambling), then its not going to end well,” he added. Kedia also said that there of course is no clear timeline on when and how this will happen.
However, the investor was quick to clarify that the bull market in India is not over or coming to an end, similar to something that Chris Wood of Jefferies had also alluded to in CNBC-TV18’s exclusive market townhall last week. Kedia said that the bull market may go on for another five to six years, but the way things are currently, the market regulator SEBI is definitely worried about it.
Recently, SEBI Chairperson Madhabi Puri Buch raised concerns that the surge in Futures & Options trading volumes is not just a micro but a macro issue. Similar worries were shared by RBI Governor, who flagged concerns about declining bank deposits and that household savings are now increasingly being invested into capital markets and financial intermediaries like Mutual Funds, Insurance Funds and Pension Funds.
Kedia also said that the money coming into the market is not coming in for investments, but for Futures & Options activity and that is a call of worry.
“₹20,000 crore a month is it huge money, but compared to $4.5 trillion dollar market cap that the Indian market has, that’s a small sum. Forget about the ₹20,000 crore a month, ultimately, it will come to ₹20,000 crore a week and later to ₹20,000 crore a day on a daily basis. So there I do not have any dispute. Money coming to mutual funds, I do not have any dispute, but it is money coming to futures and options that scares me,” Kedia said.
The Sensex, and the Nifty ended little changed but with a negative bias on Wednesday. However, the broader markets ended with strong gains with the Nifty Midcap and Nifty Smallcap indices outperforming.