The missing piece from India's global influence.

India's emergence as a global economic powerhouse is not just a matter of fiscal policy and market trends. For example, the 2022 IPO’s of LIC, Delhivery and AGS Transact (one of India’s largest digital payment solutions providers) generated negative returns of more than 25% since their listing.

All boasted immense potential, the listings were oversubscribed multiple times, indicating a significant appetite for its shares.

What does that say about investment decision-making in India?

But this isn’t an isolated event, several high-profile IPOs have faced difficulties due to inflated valuations and financial instability.

1. WeWork: It’s IPO in 2019 was highly anticipated, but it failed spectacularly due to concerns about its corporate governance, financial losses, and excessive valuation.

2. Uber: Another 2019 IPO that was one of the largest in recent history, but the stock struggled due to ongoing losses and a lack of profitability.

3. Nikola Corporation: This electric vehicle manufacturer faced significant scrutiny for misleading investors, which resulted in a plummeting stock price.

When cases like these appear everywhere, why is investor education more important for India?

Here are some examples that show a direct correlation between financial literacy and the long-term success of globally authoritative economies.

1. United States: The US, known for its well-developed financial markets, boasts a population of well-informed investors. For example, according to a 2019 survey by the Financial Industry Regulatory Authority (FINRA), 63% of Americans participated in financial education programs.

2. Singapore: According to the 2019 Standard & Poor's Global Financial Literacy Survey, Singapore had one of the highest financial literacy rates in the world, with 59% of adults demonstrating that the population regularly invests and hence learns and contributes to the country’s economic resilience.

3. Switzerland: The Swiss population consistently outperforms the OECD Financial Literacy Assessment average, earning them the name, “World’s financial hub”.

In contrast, the PWC Global Consumer Insights Survey 2019 showed that in India, 71% of respondents didn't know the interest rate on their savings account.

An educated investor and its impact on the long-term success of the Indian business ecosystem:

1. Better decision-making: Educated investors base their investments on a sound understanding of a company's financial health and its potential to deliver sustainable growth.

2. Market Resilience: A community of educated investors can help insulate the Indian economy against market volatility and sudden downturns. Their long-term perspective contributes to stability.

3. Investment in Innovation: Informed investors are more likely to support innovation as a metric to gauge the long-term success of a business.

4. Global Competitiveness: A financially literate population bolsters India's position in the global economy. It paves the way for investments in global markets and enhances India's influence in international financial systems.

In the last 2 decades of creating enduring value for businesses across industries here are the ingredients we have seen that will help you invest in creating an authoritative economy.

1. The “why” behind the “buy”: People buy what you make but they choose who you are. People buy into purposes; they simply pay for the product. Pick businesses that voluntarily place themselves in the narratives that cause positive shifts in the world.

2. Socially sanctioned diversification: McDonald's once started fine dining and failed, and yet you would buy hospitality by Vistara. Businesses whose diversification plans sound “sanctioned” psychologically are the next great value creators.

3. Long-Term Perspective: Want to guarantee success? Pick a firm with commitment and values and stay invested. According to Psychology of Money, when investing in a sound company, a day trader has a 50% success rate, a midterm investor has an 80% success rate, but a long-term investor succeeds 100% of the time.

The success of India as an authoritative economy rests significantly on the foundation of investor education. Lessons for our long-term success coincidently lie in our financial lapses.