Enam Group’s Vallabh Bhanshali said the company sees corporate earnings rising 20‑25% YoY, driven by a sustained capex cycle and expanding manufacturing capacity. — That sharp growth lens is framed against a backdrop of India’s recent volatility, with the market looking for steadier gains.
The co‑founder flagged the long‑term capital gains tax on foreign institutional investors (FIIs) as a drag on inflows, noting that no other jurisdiction taxes FIIs at the current rate. "If no one in the world taxes FIIs like we do, why should we?", he said.
Bhanshali warned that a tax change alone might not lure FIIs back; global market dynamics, valuations, and perceived trends play decisive roles. He highlighted that the current levy has already dampened foreign portfolio flows during a period when India is keen to deepen its markets.
The interview also touched on the potential for India’s capital markets to become a global powerhouse, contingent on regulatory reforms that keep the playfield competitive for both domestic and foreign investors. He urged policymakers to look beyond tax, addressing other regulatory irritants that could alienate overseas capital.
While the tax discussion dominates the narrative, Bhanshali remains bullish on India’s macro environment, projecting earnings growth of 20‑25% YoY, buoyed by capex, defense spending, and falling oil prices. He sees the capex cycle as a solid foundation for long‑term earnings, with capacity utilisation climbing.
The co‑founder praised the evolution of India’s IPO market, crediting reforms, dematerialisation, and retail participation for depth. Yet he called for safeguards ensuring that capital raised locally is deployed within India, especially for foreign companies raising money.
Looking ahead, Enam Group’s outlook hinges on the trajectory of FII inflows and how swiftly policy reforms materialise. The company’s guidance will likely be revisited as the government weighs the tax review and other investor‑friendly measures in the coming months.