In 2007 when AIG entered India, it had the right legacy and the parentage. In little over three years, it has been a victim of the global meltdown that has rendered the Indian operations inconsequential. Despite news reports of an imminent sale in India, Mehta puts a brave face and says; “The road ahead for is to build a long-term sustainable value for our customers and stake holders.”
Disappointing AUM growth: We expect the distribution business to mature and enhance value. We are firmly optimistic about the future of the industry because a mutual fund is a cost efficient and convenient vehicle to channel household savings into capital markets.
Regulatory changes: The AMCs and distribution will benefit, as customer base grows exponentially.
State of the market: Today, valuations are not very cheap in an absolute sense. Indian markets are trading at close to 20x P/E. Given the expectations of growth built into valuations, one would tend to be more careful and circumspect in stock picking.
My investing style: We believe that irrespective of market movements, stocks with good fundamentals progress and get rewarded over time. Our focus is on finding such companies. We follow a bottom-up methodology wherein we try and look for stocks with an outstanding profile available at fair valuations.