Uday Kotak warns about ‘fading animal spirits’ in kids of business families: ‘Be hungry for success and…’

Business tycoon and renowned banker Uday Kotak has raised concerns about the growing tendency among young business heirs to “take the easy way” and “manage family offices and investments” instead of “creating real-world business”.

The founder of Kotak Mahindra Bank urged the young tycoons to take risks and start their business journey from scratch. “I would love to see this generation be hungry for success and build operational businesses,” said Uday Kotak at Kotak Institutional Equities’ investor conference, Chasing Growth 2025 on Thursday.

“Even today, I firmly believe that the next generation must work hard and create businesses rather than becoming financial investors too early,” he added.

The veteran banker warned that India’s “economic animal spirits” are fading as the next generation of business families focuses more on managing their legacy than building their own companies.

He highlighted that the trend among young tycoons became more dominant after the COVID-19 pandemic, when many of them shifted their focus on trading in “the stock market, allocating funds to mutual funds and treating it as a full-time job,” reported Times of India.

Sixty-five-year-old Uday Kotak belongs to a family of trading business, but he started his own venture in 1985, which he later converted into a bank in 2003.

His Kotak Mahindra Bank stands as one of the top four private banks in India. The bank expanded phenomenally after it acquired ING Vysya Bank in 2014.

‘Money from Lucknow to Coimbatore is flowing to Boston and Tokyo’

While speaking at the conference, Uday Kotak also explained how Foreign Institutional Investors (FII) are benefiting from the high domestic institutional flows.

He underlined that Indian stocks are highly valued, as a result foreign investors are taking out their investments. More number of retail investors are putting their money into equities every day, consequentially FIIs are using this as an opportunity to book profits and reallocate their money to global markets.

"Should we continue encouraging retail investors to keep buying? Retail investors in India are funnelling money into equities daily, contributing to domestic institutional flows. Money from individuals from Lucknow to Coimbatore is flowing to Boston and Tokyo," Times of India quoted Kotak.

FII shareholding in Indian stock market drops to decade-low

Constant FII-selling spree at Indian stock market took their shareholding in the Indian stock market to a decade-low mark of 16% in January 2025.

Foreign Portfolio Investors (FPIs) offloaded stocks worth ₹78,000 crore in January 2025, marking a continuation of their aggressive selling spree after a brief pause in December 2024, reported Mint earlier. FIIs remained net sellers in sectors like IT and BFSI, whereas the FII sell-off trend reversed in some sectors like chemicals, media, and telecom.