Expect 8-10% return from markets this year: Uday Kotak

Davos: Expecting 8-10 percent return from markets this year, ace banker Uday Kotak has said India is also ready to explore various new products while there is appetite for some good "high-quality" public offers as well.

"India's inflation is under control, I see inflation of 4-4.5 percent and my view is that the markets should give a return of 8-10 percent," the Kotak group chief said while talking about his outlook for Indian markets this year.

Kotak, who was here for the World Economic Forum (WEF) Annual Meeting held last week, said the Indian markets are "open for high quality issuances, by good companies and at reasonable valuations".

"One of the biggest beneficiaries in India today is the financial services sector, especially after demonetisation. I see a significant growth in financial savings, and I am extremely optimistic about markets," he told PTI in an interview.

On new products like muni bonds, REITs and InvITs, he said, "India is ready to explore and it is a good sign of an evolving marketplace. After all the lecture we got from the West, they may be having second thoughts but India is moving forward."

He, however, cautioned that one needs to ensure in terms of new products that they balance the interests of the markets and the real economy both.

"It cannot be one versus the other," Kotak said.

Asked whether more acquisitions were in store for Kotak group, he said, "We are still a small company in global scheme of things.

"My view is that you have to look at business of institution building as a journey and at Kotak we feel that financial services in India has a huge potential from here and our job is to really serve customers across the length and breadth of the country and build an institution to last."

On when would he feel that Kotak is no more a "small company", he said, "That would happen probably when we as Indians can say that India has arrived globally. An institution can grow only that much as its country and I would love to see India being talked in the same breadth as the US and China.

"And my view is that over next to 5-10 years, India has to take its rightful place and institutions like us will have to do our bit in this journey. But the country's success is the core to what we work for and institutions are only a subset of that."

On banking sector going through a big change and whether post demonetisation, branch banking and even ATMs can no longer be important, he said, "Let the customer decide the future. What we as service providers have to do is to give the customer the options. Let the customer be the king.

"I believe that let the customer be given various options -- whether it is QR code, mobile to mobile, IMPS, wallets or whether its ATMs or whether it is branch. The customer will have to speak and it will have to be cost effective."