Amit N Dalal: A Veteran Of Capital Markets Working For Higher Returns For His Share Holders
Amit N Dalal
Executive Director
Coming from a strong entrepreneurial background he was always fascinated by the financial aspects of a business. Hence, for him choosing a career in investment seemed like a natural progression. From an early age, he has taken big bets while committing to an investment. His first endeavour involved investing almost all his personal net worth in 1989, a princely sum of 6,00,000 rupees which then was a considerable investment, to acquire a trading membership of the Bombay Stock Exchange at the young age of 23. At 25, he was able to establish himself as an entrepreneur and successfully led his Investment Advisory & Equity Trading Broking Firm for 20 years. Amit’s independent directorships and memberships of the Investment Committees have given him extensive opportunities to connect with industry stalwarts and added to his efforts of ameliorating governance standards. This inspirational leader was one of the first stockbrokers in India to regularly feature on CNBC in the late 1990s, where he imparted valuable insights by leveraging on his knowledge of this industry. Let’s hear it from him.
Tell us more about Tata Investment Corporation and its unique propositions.
Tata Investment Corporation for the last 20 years has largely been investing its funds in listed equities. A large part of the company’s portfolio is in Tata company shares. He believes that the portfolio allocation of the Company is akin to an Alternative Investment Fund with a bias toward investing in Tata companies. The Company has a select basket of Tata companies and investments in companies
listed by other promoters as well. The portfolio is actively managed. Moreover, being listed on the Stock Exchanges, the company’s primary responsibility is to protect the interests of minority shareholders while endeavouring to ensure that the portfolio returns are superior to market indices while distributing regular dividends to shareholders.
What are some of the most significant developments that Tata Investment Corporation has achieved under your leadership? What has been the motivation behind your success?
When I joined Tata Investment Corporation, the market value of the portfolio was grown and around Rs 3,500 crores. With the guidance of the Board and the support of the team, the portfolio has grown to approximately Rs 21,000 crores on 31st March, 2022. It should be noted that in the last decade the capital employed of the Company has not been augmented by any equity issuance or borrowed capital. On the contrary, the company has distributed Rs 1,500 crores of dividends over the last decade. Further Rs 450crores capital via a buyback was distributed to the share holders in 2019. Thus, accruing substantial returns for the shareholders.
Investing in the stock market is very exciting, daily witnessing new changes in every industry and the economy is something that will remain my focus for many years to come.
What would be your suggestions for share holders who are planning for more investments?
This is a very exciting time for people to put money into equities because India is in a very robust situation post-Covid. We are going to witness substantial structural growth in the coming years and therefore, we are in a situation where equity markets will perform, recording returns in the coming
Investing in the stock market is very exciting, daily witnessing new changes in every industry & the economy is some thing that will remain my focus for many years to come.
What are some of the most significant developments that Tata Investment Corporation has achieved under your leadership? What has been the motivation behind your success?
When I joined Tata Investment Corporation, the market value of the portfolio was grown and around Rs 3,500 crores. With the guidance of the Board and the support of the team, the portfolio has grown to approximately Rs 21,000 crores on 31st March, 2022. It should be noted that in the last decade the capital employed of the Company has not been augmented by any equity issuance or borrowed capital. On the contrary, the company has distributed Rs 1,500 crores of dividends over the last decade. Further Rs 450crores capital via a buyback was distributed to the share holders in 2019. Thus, accruing substantial returns for the shareholders.
Investing in the stock market is very exciting, daily witnessing new changes in every industry and the economy is something that will remain my focus for many years to come.
What would be your suggestions for share holders who are planning for more investments?
This is a very exciting time for people to put money into equities because India is in a very robust situation post-Covid. We are going to witness substantial structural growth in the coming years and therefore, we are in a situation where equity markets will perform, recording returns in the coming
decade higher than the returns in the decade 2010 to 2020.In the capital market investors are suggested to invest and hold their investments in mutual funds and/or bluechip companies for at least five years for wealth creation.
Could you reflect on some of the toughest challenges you have encountered in your journey so far?
We have had very challenging markets in this country over the last 30 years. 1992 was a year when we had the Harshad Mehta scam. So, 1992-1993 was a year full of despondency and fear in the stock market. There after, the markets bounced back with the entry of FIIs into our stock market from June 1993. Unfortunately for me what followed was a frightfully challenging 1994 - when my office with the full building in which I was located was burnt and destroyed. We all jumped out of the small window of the office to save our lives. All the systems, furniture and the office itself was completely destroyed. I was only 31 years old; despondent and shaken!
Again in 2001, the Ketan Parekh scam brought a whole slew of measures that came from the regulator to regulate the way exchanges are managed, broker compliances, settlement processes, etc, which have today brought our capital markets to global standards of compliance and settlement. Unfortunately, at that time these situations caused contractions in the turnover on the bourses for a year or two, resulting in substantial loss of broking business. Like every other stockbroker, my income had also fallen in those years. But somehow, we managed to surpass the difficult phase by keeping the organization simple and doing what we did best, which was in depth research for our investor clients. Eventually, the market rewarded us over the years.
Amit N Dalal, Executive Director, Tata Investment Corporation
An MBA from the University of Massachusetts, Amit has over 35 years of rich experience in leading the Indian capital markets. Apart from being the Executive Director of Tata Investment Corporation, he is also an independent Director on the Board of companies, member of Investment Committees and has associations with Charitable Institutions.
•Hobbies: Playing Bridge
•Favorite Cuisine: Undhiyu, a Gujarati dish
•Favorite Book: “One up on Wall Street” by Peter Lynch
•Favorite Travel Destination: Spain and South Italy
Could you reflect on some of the toughest challenges you have encountered in your journey so far?
We have had very challenging markets in this country over the last 30 years. 1992 was a year when we had the Harshad Mehta scam. So, 1992-1993 was a year full of despondency and fear in the stock market. There after, the markets bounced back with the entry of FIIs into our stock market from June 1993. Unfortunately for me what followed was a frightfully challenging 1994 - when my office with the full building in which I was located was burnt and destroyed. We all jumped out of the small window of the office to save our lives. All the systems, furniture and the office itself was completely destroyed. I was only 31 years old; despondent and shaken!
Again in 2001, the Ketan Parekh scam brought a whole slew of measures that came from the regulator to regulate the way exchanges are managed, broker compliances, settlement processes, etc, which have today brought our capital markets to global standards of compliance and settlement. Unfortunately, at that time these situations caused contractions in the turnover on the bourses for a year or two, resulting in substantial loss of broking business. Like every other stockbroker, my income had also fallen in those years. But somehow, we managed to surpass the difficult phase by keeping the organization simple and doing what we did best, which was in depth research for our investor clients. Eventually, the market rewarded us over the years.
Amit N Dalal, Executive Director, Tata Investment Corporation
An MBA from the University of Massachusetts, Amit has over 35 years of rich experience in leading the Indian capital markets. Apart from being the Executive Director of Tata Investment Corporation, he is also an independent Director on the Board of companies, member of Investment Committees and has associations with Charitable Institutions.
•Hobbies: Playing Bridge
•Favorite Cuisine: Undhiyu, a Gujarati dish
•Favorite Book: “One up on Wall Street” by Peter Lynch
•Favorite Travel Destination: Spain and South Italy