Indian equities look more attractive as AI spending concerns ease, says Uday Kotak

Veteran banker Uday Kotak has stated that Indian equities have become more attractive compared to a year ago, as concerns over excessive AI-related spending have eased globally. Kotak, speaking in a Diwali message to stakeholders, noted that India is no longer as expensive relative to other markets and offers higher growth potential.

He pointed out that foreign investors have reduced exposure to Indian equities due to relatively higher valuations compared to other countries, while the AI-driven rally in the US attracted significant global capital. Kotak cautioned that some companies' leverage in funding AI ambitions has resulted in significant overvaluation, but as concerns around excessive AI spending subside, India could benefit from a reversal in capital flows.

He also highlighted the resilience of domestic investors and warned about the impact of higher oil prices and potential monetary tightening on India's economy.

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