K.V. Kamath Says India Right to Wait on AI; Backs Strong Valuations and IPO Market

K V Kamath Says India Right to Wait as AI Hype Plays Out; Supports Strong Valuations, IPO Boom, and Banking Reforms

Veteran banker K V Kamath believes India’s measured approach toward AI adoption, its resilient IPO pipeline, and ongoing banking reforms reflect the country’s maturity in balancing innovation with prudence.

At the Global Leadership Summit 2025, K.V. Kamath, Chairman of Jio Financial Services and one of India’s most respected financial minds, cautioned against rushing into the global artificial intelligence (AI) frenzy. Comparing the current AI enthusiasm to the early stages of the dot-com boom, Kamath said India’s strategy of waiting for technologies to mature could give it a long-term edge.

‘Better to Wait Than Pay the Early-Mover Premium’

Kamath remarked that while AI represents transformational potential, much of the global excitement is still speculative. “A bit of the hype has to die down before the true economic value becomes clear,” he said, drawing parallels to the late 1990s internet bubble, when companies went public without sustainable business models.

He noted that India’s historical tendency to adopt technology at later, more cost-effective stages has consistently paid off. “We lose nothing by waiting out six months to two years and joining the bandwagon when costs have come to what I call reasonable levels,” Kamath said.

He emphasized that India should not succumb to a fear of missing out (FOMO). “Being late to the party has always been good for us,” he said, suggesting that waiting allows India to deploy proven technologies without bearing early-stage risks or inflated costs. “Better be out of it at this point,” Kamath added.

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AI Hype Mirrors Dot-Com Era—but with Real Foundations

Kamath acknowledged that the AI revolution is more rooted in tangible technological progress than the dot-com bubble ever was. However, he said speculative overreach still exists, especially as global companies race to integrate AI into every aspect of business without clear revenue models.

“The enthusiasm is understandable,” he said, “but until the hype settles and sustainable monetisation becomes visible, India’s conservative stance is the right one.”

‘Right Price’ for a Growing Market

Shifting focus to India’s equity markets, Kamath defended current stock valuations, calling them appropriate for a high-growth economy. “For a growing economy, this is the right price,” he said, while acknowledging that certain stocks might show pockets of exuberance.

Kamath dismissed concerns that higher valuations might discourage foreign investors. He said India’s consistent growth trajectory and institutional strength justify premium valuations. “Investors should see it as a reflection of confidence, not overvaluation,” he noted.

Buoyant IPO Market Reflects Strong Corporate Governance

On the subject of India’s booming IPO market, Kamath said the surge in new listings—particularly in technology and fintech sectors—signifies a maturing economy. “The entry of new-age firms into public markets will strengthen India’s core by improving governance and transparency,” he said.

He described the vibrant IPO pipeline as a sign of deepening capital markets and an expanding investor base. “IPO activity is not just about raising money; it’s about companies being accountable to the public,” Kamath added, pointing out that better disclosure standards will create stronger, more credible institutions.

India’s Growth Story and Domestic Capital Strength

Kamath reiterated his optimism about India’s economic outlook, stating that the country’s long-term growth runway remains intact. “We should aspire for 10 percent growth,” he said confidently, noting that India now has a broader range of funding instruments than ever before.

He pointed to the growing role of InvITs, REITs, and deep capital markets in supporting infrastructure and corporate growth. “Questions about funding India’s growth are no longer valid,” Kamath said, crediting the government’s policies for mobilizing domestic capital efficiently.

Banking Consolidation Seen as a Timely Reform

Praising the government’s ongoing consolidation in the public sector banking (PSB) space, Kamath called it a “correct move at this point in time.” He said merging state-run banks while the economy is strong allows for smoother integration and creates the scale needed for a digital, technology-driven financial system.

“Consolidation brings scale, bulk, and efficiency,” Kamath explained, adding that the reform would make PSBs more competitive and agile.

He also supported raising the foreign institutional investor (FII) cap in public-sector banks from 20 percent to 49 percent, arguing that it would provide a level playing field with private banks and attract more global participation. “Let them compete on equal terms,” he said.

A Cautious Yet Confident Outlook

In conclusion, Kamath’s message was one of balanced optimism. He urged policymakers and investors to maintain discipline amid global technological hype, while continuing to build on India’s strengths in capital formation, financial inclusion, and governance.

“India’s story is one of patience and preparation,” Kamath said. “We don’t need to chase trends—we can lead when the time is right.”

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