It seems like another lifetime. Yet it was just 30 years ago that India’s economic liberalization process began. Nilesh Shah, chief executive officer, Kotak Mahindra mutual fund remembers those days like as if they were yesterday.

Shah had just about got his chartered accountancy qualification. He has passed out with a gold medal and got his first job with ICICI Ltd. Here, he worked in the merchant banking division where he helped companies raise money through capital markets.

“It was a rough time for India. The governments were unstable, Rajiv Gandhi, the prime ministerial candidate was assassinated, an emergency bailout loan was sought from the International Monetary Fund by pledging gold,” says Shah.

He says that in those days he used to go with his seniors to companies who aspired to raise money from the capital markets, that were highly controlled and less regulated at the time.

The old-age traditional businesses, Shah remembers, were skeptical. They used to say that import duties were brought down, imports would become cheaper and Indian businesses would die. “But the new age businesses had started to celebrate and used to say that we were ready to conquer the world,” he recollects.

Shah says that a lot of things have changed since then. The capital market regulator, Securities and Exchange Board of India (SEBI) was born in the 1990s that brought order in a highly unregulated and “wild, wild west stock market.”

What about mutual funds? Shah tells us stories of how up until the mid 1990s, the Indian mutual funds industry was dominated by the public-sector fund houses. Some of them used to give assured returns; a practice that SEBI later banned knowing the unsustainability of it.

Shah takes us through how fund houses themselves reformed and strengthened their processes. Investors, he says, have also matured. Shah says that as information began to become more easily accessible and available, thanks to internet technology and transparency brought about by SEBI and the stock exchanges, investors also started reading up more about companies.

It’s a whole new world out there, says Shah, who has also grown throughout these past 30 year period. 

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