One of the country's biggest fund manager advises investors to buy the dips

Nilesh Shah, one of the country's biggest fund manager and the managing director of Kotak Mahindra Asset Management, said buying the dips is the best strategy in the Indian markets. There can be near-term challenges, but India will become the third largest economy by 2030, Shah told CNBC-TV18 in an exclusive chat.

By buying dips, Shah meant that investors should buy stocks when their prices are very low.

When stock markets fall considerably, the prices of most stocks drop and, hence, are available at far lower prices than earlier. Even blue-chip stocks are available at lower prices, and thus it gives a choice to investors to choose from a wider range of stocks.

Buying the dip is best suited for long-term investors as they can enter certain stocks at lower prices and book profits as soon as the market jumps back.

Shah further said that  India would outperform, but margins may taper down.

"On a near-term basis, India is expensive. But on a five-year basis, the market is cheap," he said.

In the past eight sessions, Nifty50 has been down over 6 percent. On a year-to-date (YTD) basis, Indian markets (S&P BSE Sensex) have been flat primarily due to the major correction seen during the beginning of this calendar year.

According to a Morgan Stanley report, the monetary policy tightening in the US and strength in the dollar could continue to be a source of volatility for Indian equities in the coming months.

Shah said that small and midcap IT companies had run ahead of fundamentals. He thinks the next six months is a good time to start accumulating IT companies.

Kotak Mutual Fund was established in December 1998 and is a wholly-owned subsidiary of Kotak Mahindra Bank. Kotak Mahindra Asset Management Company (KMAMC) is the asset management company for Kotak Mahindra Mutual Fund.

It offers a wide range of mutual fund schemes across equity, debt and hybrid categories along with the fund of fund schemes and exchange-traded funds.

According to AMFI, the average assets under management (AUM) of the Indian mutual fund industry for August 2022 stood at Rs 39,53,423 crore. AUM of the Indian MF industry, as on August 31, 2022, stood at Rs 39,33,878 crore.

The total number of accounts (or folios as per mutual fund parlance) as on August 31, 2022, stood at 136.5 million, while the number of folios under Equity, Hybrid and Solution Oriented Schemes, wherein the maximum investment is from the retail segment, stood at about 108.9 million.

Indian MFs have currently about 57.2 million SIP accounts through which investors regularly invest in Indian MF schemes.