Sharp run-up in stock valuations unsustainable: Commerce Minister Piyush Goyal

The sharp run-up in valuations in the Indian stock market was artificial and not sustainable, and the mutual fund industry should ensure that this does not happen in the future, union minister for commerce and industry Piyush Goyal said.

He was speaking at an event organised by mutual fund industry body Association of Mutual Funds in Mumbai on Saturday.

Goyal pointed out an instance where the valuation of a car dealer has "hit the roof".


"The run up is artificial and unsustainable, and we are facing some of the brunt of that," said Goyal. "This is something we need to reflect upon and need to think of and see how such a run up doesn't happen in the future."

He said there is a FOMO (fear of missing out) effect among investors and a large amount of money is entering the markets. The minister said it is the job of the mutual fund industry to protect investors and asked it to be conscious of its responsibility towards stakeholders.

The ₹70 lakh crore mutual fund industry is nearly 20% of India's GDP and is creating a bridge between investors and industry, he said.