The Earnings Story Sinks In As Mid Caps Race Ahead
The markets are generally positive with the recent breakthrough on tariffs
On Episode 725 of The Core Report, financial journalist Govindraj Ethiraj talks to Ramesh S Damani, Member at the Bombay Stock Exchange (BSE) as well as Chirag Doshi, Chief investment Officer-Fixed Income at LGT Wealth India.
SHOW NOTES
(00:00) Stories of the Day
(01:00) The earnings story sinks in as mid caps race ahead
(03:06) Market watchers are predicting an oil glut next year which is good news for India
(06:03) What India’s ambitious $5 billion export promotion mission needs to become a reality
(08:26) Moody’s says India will grow at 6.5%
(09:06) What low inflation levels mean for fixed income in general and specific
(16:46) The art of writing letters to shareholders and insights from the world’s greatest investor
(31:41) How London luxury home prices are crashing
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NOTE: This transcript contains the host's monologue and includes interview transcripts by a machine. Human eyes have gone through the script but there might still be errors in some of the text, so please refer to the audio in case you need to clarify any part. If you want to get in touch regarding any feedback, you can drop us a message on [email protected].
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Good morning, it's Friday, the 14th of November, and this is Govindraj Ethiraj broadcasting and streaming. Weekdays from Mumbai, India's financial capital.
Our top stories and themes as we come to the weekend.
The earning story sinks in as mid-caps race ahead.
Moody says India will grow at 6.5%.
Market watchers are predicting an oil glut next year, which is good news for India.
What India's ambitious $5 billion export promotion mission needs to become a reality.
What low inflation levels mean for fixed income in general and specific.
The art of writing letters to shareholders and insights from the world's greatest investor.
And finally, how London luxury home prices are crashing.
Mid-Caps, Power Ahead
President Donald Trump on Wednesday signed legislation ending the longest government shutdown in US history. The move will restart disrupted food assistance, pay hundreds and thousands of federal workers, that's central government workers, and revive a crippled air traffic control system. The effect of the shutdown ending was somewhat priced into the markets on Thursday, though they did have a positive impact on Wednesday.
The other reason markets are generally positive is, of course, that we could see some breakthrough on tariffs. The Trump team is fighting a war on multiple fronts on trade, has done so for many months now, and the strain is clearly showing now. And perhaps the realisation that the longer term damage is much more.
At a conference I attended yesterday in Mumbai, DHL Group CEO Tobias Mayer said high tariffs in the United States have also affected US exports, as the cost of goods produced in the US with imported materials has gone up, making them more uncompetitive globally. This is, of course, something Indian exports also suffer from, the inability to get input materials at lower costs because of high tariffs on imports, like synthetic fibre for apparel. Now we've been speaking of an earnings turnaround, as articulated by several analysts, including Sanjeev Prasad, Managing Director of Kotak Institutional Equities, earlier this week on The Core Report.
Interestingly, a report in The Economic Times says India's nifty mid-cap 100 index has risen 6.5% to scale fresh all-time record highs, even as the Sensex, the nifty, and small caps continue to trail behind. It also quotes experts attributing this to strong earnings performance, valuation comfort, improving investor sentiment, backed, of course, with better-than-expected Q2 or second quarter results, and operational resilience in a challenging environment, something that we're, of course, seeing in larger companies as well, and as we've been discussing here. On Thursday, the Sensex and nifty ended largely flat after a volatile session.
The Sensex was up 12 points at 84,478 after some swinging back and forth. The nifty 50 was up three points at 25,879, so all in all, a flat market. The broader indices were down.
The nifty mid-cap 100 was down 0.3%, and the nifty small-cap 100 was down 0.3% too.
Oil Prices
Oil prices are down in the last week, and we'll come to that, but the big question weighing on everyone's mind is, what is the coming year looking like? Because that also affects a take on geopolitics as much as supply and demand. It also helps countries like India, which obviously benefit on a whole range of macroeconomic fundamentals if oil prices are low, and thus our import bill is also low.
Now, market watchers are expecting a glut next year, Reuters reported, adding that the Organisation of Petroleum Exporting Countries, which has long held the view that oil demand would remain healthy, flipped estimates in the third quarter from a deficit to a surplus on higher US production. The International Energy Agency, based out of Paris, meanwhile, has said that there would be a record surplus in 2026. Vandana Hari of Singapore-based analysis firm Vanda Insights told Bloomberg Television that the world is said to be in a slight surplus through this quarter and going into the next quarter.
Meanwhile, on Thursday, oil prices were up after falling in previous days. Brent crude futures were around $63 a barrel after dropping close to 4% a day before. Analysts told Reuters that there should be considerable support to oil prices around $60 a barrel, given that there could be short-term disruption to Russian export flows once stricter sanctions kick in.
The United States has hit Lukoil with sanctions as part of its efforts to bring the Kremlin to peace talks over Ukraine. The sanctions specifically prohibit transactions with a Russian company after November 21, Reuters reported. Seeking to energy, Chevron, the oil giant, plans to keep boosting oil and gas production through 2030 but is also becoming more serious about entering the power business, according to the Wall Street Journal.
As part of an annual presentation to investors on Wednesday, the second-largest U.S. oil producer says it wants to bring online by 2027 a power plant that would service an artificial intelligence data centre in the West Texas shale patch where it pumps natural gas. It also said it has entered exclusive negotiations with a premier customer for that project and is expected to provide about 2.5 gigawatts of off-grid power, enough to power about 2 million homes, with the ability to expand to 5 gigawatts if the demand warrants, according to the Wall Street Journal report. So if Chevron is moving into captive power generation of this nature, which means targeting AI data centres, could Indian energy giants be far behind? Well, they all do some power generation already.
For instance, ONGC has a few thousand megawatt capacity of gas base as well as renewable energy power plants, including wind and solar, distributed across the country. So a targeted effort at AI data centres does not seem too far on the horizon.
A New Export Promotion Scheme
The Indian government has approved spending of about $5 billion, about 45,000 crore rupees on support for exporters, including 20,000 crore rupees in credit guarantees on bank loans. It approved the export promotion mission to create a framework for strengthening India's exports. All of this obviously is in the context of the 50% tariffs that India is facing from the United States.
A note from the Global Trade Research Initiative or GTRI authored by founder Ajay Srivastava says the plan is a broad outline that still needs to be turned into workable schemes and its annual budget is far too small for the scale of its goals. The initiative is a step forward, he says, but its impact will depend on swift rollout, better coordination and more funding. The mission is two parts.
One will make trade finance cheaper for small enterprises through interest support, export factoring, collateral guarantees, credit enhancement and credit cards for e-commerce exporters and sectors hit by recent global tariff hikes such as textiles, leather, gems and jewellery, engineering goods and marine products will get priority. The other part of the scheme will provide non-financial support like help for export quality and compliance, better branding and packaging, participation in international trade fairs, export warehousing, logistics support and inland transport reimbursements. EPM also, the GTRI points out, subsumes earlier schemes like the interest equalisation scheme and the market access initiative.
But GTRI says the mission which was announced in February is still only a broad framework and needs to be translated into detailed schemes with precise guidelines specifying eligibility processes and dispersal rules. A new online system must also be developed and doing all this may take months before exporters actually receive any benefit. It also says that funding is a concern.
The mission's total outlay of 25,000 crore over six years is less than 4,200 crores per year. GTRI re-emphasises that the slowdown in rollout is something that one must focus on because older programmes which operated till last year have made no payouts this year, leaving exporters unsupported during a difficult global environment. So the mission success will depend on quickly issuing detailed guidelines, ensuring adequate funding and building strong coordination mechanisms.
Otherwise, small enterprises will struggle, GTRI has said. Of course, as time passes, we may well see the tariff regime being normalised or being brought down to more acceptable levels.
Moody's Forecast
Moody's rating said on Thursday, India's economy is expected to grow around 6.5% through 2027 and has kept its forecast for GDP growth at 6.4% in 2026 and 6.5% in 2027. It says that India's growth will continue to be strong because of heavy investment in infrastructure, rising consumer spending and diversified exports, even though private companies are still cautious about spending. All of this is part of its global macro 2026 report, which talked about growth being steady but subdued in 2026.
Broadly, it says India's economy has remained strong despite global challenges and high US tariffs on some goods. Inflation and fixed income. India's retail inflation numbers fell to a record low as we said yesterday of 0.25% in October, thanks to a sharp fall in food prices and a reduction of goods and services tax on consumer goods, all of which should lead to a rate cut or could lead to a rate cut by the Reserve Bank of India next month.
Low Inflation
Declining interest rates and consumer tax cuts are also seen offsetting some of the pressure on India and the punitive tariffs on exports. So what's the current mood for the fixed income space and to what extent does the sentiment reflect the quality of debt issuances by Indian businesses? I reached out to Chirag Doshi, Chief Investment Officer for Fixed Income for LGT Wealth and I began by asking him about the latest numbers and then about the quality of issuances from India Inc which could help investors take slightly riskier bets than normal.
INTERVIEW TRANSCRIPT
Chirag Doshi: I think the inflation that 0.25 which just came in, of course, it has base effects as well as the food prices coming down and going higher, we will see again inching back upwards. But yes, that definitely opens the door for the RBI to consider another rate cut, which we believe RBI may do in December. Very, very strong view.
And I think this basically means that, you know, the yields from here will have to move lower. And if the growth, you know, and as we all know, that it was 7.8, but it is not going to stay there. So RBI will need to support growth in the future.
So that means that the interest rates are going to be softer than they are right now.
Govindraj Ethiraj: How are you seeing the overall fixed income market? I mean, if you were to look back, maybe a quarter or two, and then bring us back to the present.
Chirag Doshi: If you look at last two quarters, I think the world was all tight place, you know, how Trump and his policies affected the entire global markets and India was not spared. We saw that the yields have inched up. The RBI was trying to protect the rupee and hence we saw that, you know, there was a lot of intervention which trained out liquidity, but RBI is supplementing it.
Last few sessions, we have seen that RBI has been also buying from NDSOM. So the others number is quite high and markets are speculating that it could be RBI, which is buying from the bond markets to improve liquidity as well as support yields. So the yields have inched up, but going ahead, we see that it should ease from here at least another 20 to 25 basis points from where they are right now.
Govindraj Ethiraj: So if you were to or rather if I were to ask you about the two or three factors that are driving interest rates, one I'm assuming you're saying is the Reserve Bank itself because it's intervening in the forex markets. That's right. What are the other factors?
Chirag Doshi: So other factors again, market's anticipation of cutting a trade deal with US. Currently, the tariffs are at 50%. I mean, they're reducing, of course, it will impact the interest rates.
There is also the GST, right? I mean, which is positively affecting inflation. But the thing is that it is not transmitting into the rates.
We have not seen that happen, even though RBI has cut by 100 basis points. So the repo rate at 5.5 and your 10-year yield closer to 6.5, there is 100 basis points spread. So it has not impacted it yet.
But going ahead with the supply demand being taken care of and markets are expecting that RBI will have to pull out a lot of supply via the open market operations or operation twist that it will do, where it will, you know, sell the shorter end and buy the longer end, we will see that the interest rate curve will have to ease off from here, especially on the longer end.
Govindraj Ethiraj: Right. So given all of this, and as we head towards the end of 2025, what's the strategy that you're advocating?
Chirag Doshi: So if I had to sum up in one line, it will be carry now and optionality later, right? We are in a phase where definitely inflation has cooled off meaningfully. And today's number just proves that point.
Policy is on a hold and watch zone. So that combination rewards investors who focus on quality carry without taking reckless duration bets. So our stance is a barbell strategy where we are saying that you be invested in the three to five year bucket for the quality PSUs and BFCs, which are AAA rated, AA plus rated for steady accrual and a roll down.
Also add some part of the portfolio to high yielding credits where you get that higher portfolio carry where, you know, you don't take bets which are very low down the accredit rating ladder, but AA minus 2A is what we are recommending. And on the other side, a measured 10 to 15 year GSEC sleeve to capture convexity if global yields ease and we are expecting that they should ease. This along with some target maturity ETFs are another tool.
They align maturity with your horizon and reduce the reinvestment risks. So all this put together creates a portfolio which is disciplined. You know, I put it that discipline carries the hero and duration is the cameo.
So that's what we are currently recommending.
Govindraj Ethiraj: Right. Let me ask you a slightly broader question. So if you were to look at the quality of paper overall, I'm talking about private sector.
How would you categorise it today or how would you describe it today versus let's say a year or two ago?
Chirag Doshi: There are a lot of issuers which have come up. The quality has in fact remained the same or it has improved with the banks also lending aggressively with the rates coming down and the liquidity being on the surplus side. I think they have been able to get funds from various sources, not only the private markets.
It is banks, it is alternate investments funds. The accessibility of these issuers to sources of funds have improved, which basically gives us more comfort. Whenever there is accessibility to the funds, you basically see that the rates compress.
The markets also move towards allocating more money to these names so that the portfolio yields can be managed well. So when you see that the AAAA plus the yields drop, a large chunk of the portfolio from the fund managers or portfolio managers shift towards these kinds of instruments.
Govindraj Ethiraj: Right. You talked about GSECs. So if you were to let's say contrast now risk versus returns in a very broad sense, how are you measuring it today?
Chirag Doshi: I'd say focus has shifted from maximum yield to reliable yield today. We are seeing three distinct behaviours. First is a safety core around the portfolios are being allocated to some extent to government bonds, state development loans, AAAP issues.
Second, selectively credit sleeves. So roughly 25 to 30 percent in AA, AA plus or below names. Third, a small opportunistic bucket, maybe 5 to 10 percent in the higher yielding credits, so which are higher yield issuers, say in the range of A minus, A plus with sound fundamentals where you can get that extra.
And this is in the early teens. Right. So that really adds flip to your portfolio.
This mix delivers alpha through carry, roll down and selective spread compression without compromising the risk discipline. So that's what we are seeing as of now.
Govindraj Ethiraj: Last question. If you were to look back again a couple of years, let's say if you're invested in an A minus, which obviously is a higher risk profile, would these companies and their financials have held through this period?
Chirag Doshi: Yes, they have actually. In fact, we have seen improvement. So in, say, for example, not in the microfinance space or the highly unsecured loan portfolios, but majority of them, say, for example, manufacturing corporates or corporates who have strong balance sheets or strong business model, they have definitely seen improvement in their balance sheets, which has led to yield compression.
So earlier when these say one year before we were trading at least 100 basis points higher from where they are today. So definitely the transmission of rate compression has happened there. Two reasons.
One is liquidity as well as performance of the balance sheet.
Govindraj Ethiraj: Chirag, thank you so much for joining me.
Chirag Doshi: Thank you, Govind.
Letters To Investors
Warren Buffett, the outgoing CEO and the single largest shareholder of Berkshire Hathaway has said he will no longer write annual letters to shareholders and step back from public appearances. However, the Oracle of Omaha will continue to write an annual Thanksgiving letter. The 95-year-old turned Berkshire from an obscure textile company into the world's largest insurer and holding company and his letters to shareholders have been amongst the most eagerly awaited financial documents since he started writing them in 1965.
Buffett's letter to Berkshire holders published in February was his 60th edition. Value investors from world over eagerly look forward to the annual Berkshire meeting in Omaha, Nebraska where Mr. Buffett and his long-term partner the late Charlie Munger used to engage with shareholders. Their key strength and message explaining complicated concepts in simple language.
Ever since Charlie Munger passed away two years ago, Mr. Buffett has been pulling back since then though he reportedly still goes to office five days a week. In the latest letter, he emphasised continuity and consistency saying he hoped Berkshire Hathaway would require only five or six CEOs over the next century and decrying the normal corporate tendency to look for CEOs whose goal is to retire at 65 to become look at me rich or to initiate a dynasty. Mr. Buffett also returned to the question that many have asked over the decades as to why he chose to live and work out of the American Midwest as opposed to moving to Wall Street.
He said he liked living in the small town where he was born and that the centre of the United States was a very good place to be born, raise a family and to build a business. Between 1965 and 2024, Berkshire Hathaway has returned about 20% compounded which is roughly double the return from indices like the S&P 500 in the same period. He also ended the letter with thoughts on his legacy.
Decide what you would like your obituary to say and live the life to deserve it and keep in mind that the cleaning lady is as much a human being as the chairman. I reached out a long-time Buffett fan and value investor Ramesh Damani and I asked him about the importance of such letters in general and from Warren Buffett and the art of communicating investing strategy wherever in the world.
INTERVIEW TRANSCRIPT
Ramesh S Damani: Warren Buffett has almost categorically stated that he wrote the letter so that his sisters and his aunts could understand it. They live in plain English conversation style with a lot of humour, a lot of folksiness. Let me just tell you how important it is.
You know, there's a book by Robert Fulgram called, Everything I Needed to Learn I Learned in Kindergarten, which tells about how kids learn how to share, how to play fair, how to flush, how to have milk and cookies. But everything we learned as value investors, and I'm talking from people from Melbourne to Mumbai, learned from listening, watching, and reading these Warren Buffett letters, that important a part of our education. In fact, many of us have gone on to say that we could have gotten an MBA or we could have read those letters.
And the letters would probably be a cheaper, better, more experienced way to understand markets than an MBA. So, you know, it's hard to overstate the importance of the letters to us. They've been a treasure trove of intelligence over so many years.
And I think there will be a lot of people who are very sad that after yesterday's letter, he's going to go quiet.
Govindraj Ethiraj: Right, so I'll come to the latest letter in a moment. But if you were to now look back, some of the letters that have shaped your own thinking and investing approach, what would they be the ones or the themes that you can recall offhand?
Ramesh S Damani: Well, these letters are full of nuggets. I mean, it's almost priceless in terms of understanding the businesses. You make CEOs understand the business, to make ordinary investors understand the business.
First, let me give you a sweep of what Warren Buffett has actually accomplished. When I was a young student in America, I went in 1977. It's hard to believe that many years ago as a student in America.
And just for the record's sake, I checked back what the price of Berkshire was in 1977. It was about $75 a share. Today, it's closer to $750,000 a share.
So had I, in my wisdom, which I didn't have clearly, bought 1,000 shares of Berkshire and spent the rest of my life at the beach or in Vegas, I'd be worth $750 million today. Over 45 years, it's become $750 million, a compounded rate of about 20%, 21% over a period of 41 years. That is almost Don Bradman-esque-like statistic in the world of investment to compound over 21% over such a long period of time.
And Warren Buffett has done that. And through all this, he's given his homilies. He's given his wisdom to us.
And what he's taught ordinary value investors is, of course, a menacing. I'll just highlight one or two things that I think are very important. First, he explained the concept of what he calls Mr. Market to us. I think a lot of us approach investing as a T20 game going. We say every ball we have to hit out or get out, get the scoreboard ticking. Warren Buffett emphasised that it's not even a five-day test match.
Every day, the market throws a ball at you. Reliance said 2,000. Infosys at 1,400.
Dr. Reddy's at 2,500. But an investor doesn't have to do anything. He just has to watch the ball.
Occasionally, Mr. Market is schizophrenic, if you will. He will throw you a curveball with such a cheap valuation that you just step up to the plate and buy it. But if it's overpriced or it's fully priced, you don't have to do anything.
So he taught us the long-term importance of understanding the market, schizophrenic personality, and waiting for the right moment to strike it. When the ball is full toss outside the R-sub, you want to hit it for a six. Rather than trying to hit every ball out for a six, he taught us that.
I think his second most important legacy, which he obviously showed us how to do it, is his belief in long-term compounding. So Berkshire has compounded its over a 51-period at 21%. And if you believe Buffett, and all of us do, the key to long-term wealth is understanding that compounding business, that a great business, modern, attractive price probably never has to be sold, and keep generating returns over long periods of time, the richer you will become as his own stock in Berkshire Hathaway showed.
So a lot of people who come up with, oh, we can double your money in six months, three months, I would suggest, as Buffett said, give them a pass. It's a very extremely hard act to follow. And if you get a business that can grow at 20, 21%, that's worth its weight in gold.
Govindraj Ethiraj: Right. One of the things that keeps coming up is that can others be as, let's say, articulate and eloquent the way Buffett has been in his communication to shareholders specifically now? How do you think Indian companies do on that score?
And if they were to maybe, let's say, set a target for themselves saying, okay, can we, you know, here's one notch more or one notch better that I could do in the style of Warren Buffett, what would you think it should be?
Ramesh S Damani: As I follow Indian companies, I don't want to take any names. There are companies that, you know, follow Buffett-like approach. They have a fortress-like balance sheet.
They're very focused on the business. They grow the business at 20, 25% of that. I really think that in the last 30 years, while we've lived our life forwards, we need to understand it backwards.
You know, we had almost a golden age of Indian equity investing. You think about it. In 1989, when I came back to India, the Berlin Wall fell.
A few years later, Manmohan Singh announced his major liberalisation budget. And a few years later, India emerged as a tech superpower. So the enormous tailwinds that drove Indian investing and the index from 800 to 80,000.
But having said that, India has occupied a, you know, honoured place among emerging markets for this return, diversity, shareholder base over many, many years. Much better than I would say even China has. I mean, my friend Rakesh returns in his brief lifetime was actually even better than Warren Buffett's.
But I think Warren Buffett is Warren Buffett because there will not be another one like Warren Buffett. I think it's hard to imagine anyone beating Don Bradman's stat of 99.99 or a lifetime. It's hard to imagine anyone in public markets beating Buffett-like thing.
His equanimity, his ability to cut through the Gordian knot, if you will, his ability to explain himself, and his ultimate belief in America was don't bet against America, be bullish in America. I find that same trait among some of the great Indian investors. Always bullish in India, always invest in India, despite a myriad of problems.
So there are people who have emulated and quite successfully Warren Buffett. As I said to you in my introduction, I'd rather have read his Buffett's letter when I was 20 and bought his shares, then got an MBA. But I spent money and got an MBA.
I wasted a lot of my dad's money, actually.
Govindraj Ethiraj: Right. And he says even in the latest letter that remember to thank America for maximising your opportunities. Let me come back to the approach in investing.
So one of the things that he reminds us, of course, he's mentioned this many times, is the life he leads. You know, he stepped out of Omaha, but he came back very quickly. And he never moved out of that place and lives in the same house that he bought in 1958.
My question is that, of course, not everyone can be as simple and frugal like Warren Buffett. But what are the other things that one could imbibe or absorb in his maybe almost hermit-like approach to investing? And or conversely, is that even possible?
Ramesh S Damani: It's extremely hard what he has done and the lifestyle he's led. I mean, you know, we are all, you know, humans at the end of the day and markets won't change because markets will move from fear and greed. The two incidents I'd like to point out about Warren that he and Charlie Munger had this famous partnership.
And I think Warren Buffett has been on record saying that he's never had a disagreement with Charlie. They agreed on almost everything in this partnership of 50 years. And Warren Buffett has himself said that the architect of Berkshire was Charlie Munger while he was the general contractor in a fit of modesty.
But there is, you know, some truth to that. I think one of the ideas that Munger held Buffett and Buffett implemented that rather than buy a cheap business at a throwaway price, you buy a good business at a fair price. And when he bought See's Candies, I think that kind of propelled his thinking that if you pay up for a business and you don't look at only at the earnings, but also look at its intangibles that they own, the value of the brand, the value of the mode, the value of the intellectual property, that will return And especially as we transit from an analogue economy to a digital economy, you know, sometimes analysts make the mistake of only looking at earnings and saying the stock is very expensive or the stock is very cheap when they're not measuring the inherent mode that the business has, the inherent intellectual property that it has. So I think Warren Buffett taught us, for example, when he bought Coke as a franchise stock, the importance of the trademark. And, you know, he famously said that he bought Coke, 10% of Coke for $1 billion.
And someone said to him that if someone gave him $10 billion or $100 billion and said, replicate the Coke franchise, he would return the money back and say it can't be done. That's how much he valued Coke's intellectual property, trademark, global market share that Coke had. So I think, you know, as investors, we all learn how to look beyond the P ratio that we are so fond of and look at the more intangibles of the business and what is the mode in that business and how durable is the mode to the competitive advantage that the business enjoys.
It's amazing how many times I go back when I'm analysing a company, think what would Warren have done in this situation, how Warren would have thought about the situation. And that's true across the generation of value investors. So his mark is almost indelible.
Govindraj Ethiraj: Right. So one of the things that he refers to in his letter is succession. He talks about his children who are also in their late 60s and 70s and are now in a way ready to hand over their own wealth and distribute it further, which he talks about.
We're also seeing an interesting phase of succession in India in many business groups and family owned businesses. And of course, more than 70, 80 percent of businesses are family owned in any case. Is there anything that we can take away from the way Warren Buffett is handling it?
Of course, acknowledging that this is a financial services company, it's not an industrial enterprise, so to speak.
Ramesh S Damani: I'm actually very impressed when I look at investors out of India, a lot of them are donating significant chunks of their wealth to philanthropy. You know, they're building hostels, they're building hospitals, they're building eye cares, they're building education institutions. You know, two of the most famous investors in the large street, Mr. Dhawan has built Ashoka University in Delhi. Nimish Bhai has built Flame University in Pune. And there's so many doing similar things. I think in capitalism, to make money is the way you keep score of how good you are and how better you are in the system.
But I think as Warren Buffett and many others have expressed, to die rich is almost a sin. So I think a lot of people in India, including many investors I admire in India, are doing the same thing, are taking a large portion of the wealth and giving it back for the benefit of society. So clearly, I think his impressions have rubbed off.
And I think there can be no better testament to the life he's lived and the way he's lived it, is that he in fact is giving back 99% of his wealth back, which is almost extraordinary. I think India is still a capital staff country. So I don't think we've moved to that level of philanthropy yet.
But I'm very encouraged by what I see, you know, the budding millionaires in India do. I think a lot of them are stepping up to the plate and really putting the money to good societal use.
Govindraj Ethiraj: And of course, this is more common in America now. His own children have no role in the company. I mean, you could take so many companies, Microsoft, Apple, you know, where the founders have separated the business, the running of it from their generational transfers.
And Warren Buffett has, of course, done the same too. I mean, in India, I guess we're seeing it in a few cases here and there. But is there something to take away?
Ramesh S Damani: I've always actually amazed by doing that. To not have a son, you know, chair Berkshire Hathaway as an executive capacity, he will be chairing it in a notional capacity or not to teach his son. A lot of pride in my son and my grandson actually getting into the business.
So my sense is the generation in India will contribute to wealth creation, capitalism, corporate governance in India. So it's a good thing to do that. But I think Warren Buffett has very clearly said, he said, they give enough children, give enough so they don't want for anything, but don't give them so much that they want to do nothing.
And I hope that the next generation in India are hungry enough that they need to go out and continue the good work that the generation previous to them has done and continue to build wealth. Because I think as a society, it's very important that we will wealth and build profits for future generation. I think for too long, we've had some wrongheaded views in India about socialism and how the pie is divided and how everything is limited and how we should distribute the cake fairly, but it's a small cake.
I think my generation of Indians for the first time believe that the cake can be expanded and that everyone can have more, not less. And I think it's a good thing for it to continue. At least I think perhaps it's too early to emulate Warren Buffett in that matter.
I think he's extraordinary though. I'm not really belittling what he's done, but I think India is probably 20, 30 years behind in that race.
Govindraj Ethiraj: Right. And there are so many other things to emulate him, as you've pointed out.
Ramesh S Damani: So yeah, absolutely.
Govindraj Ethiraj: Ramesh, thank you so much for joining me. It's been a pleasure speaking with you as always.
Ramesh S Damani: Sure, Govind. Have a great show. Thanks. Bye.
London Real Estate
And before we go, a flat in one of London's most luxurious new apartment blocks is sold for about £25 million or about $32 million, a discount of more than 50% from the asking price earlier this year, according to Bloomberg.
The final new-build apartment for sale in Chelsea had been reduced to $45 million from $55 million before a cut price deal was agreed this month according to sources who spoke to Bloomberg and it reflects a sale price of about £2,300 a square foot, almost half the average level of the eight earlier sales in the project. The top end of London's housing market has been hit further this year by the abolition of a preferential tax status enjoyed by some wealthy foreign residents which has prompted more sellers to agree to hefty discounts in order to secure deals, says Bloomberg, which adds that there were 27% more price deductions on £5 million-plus homes between August and October than the same period last year. That's more than double the average for that period in the years from 2017 to 2019.
