Sep 22, 2023 · 1h 13m · neon-show
Watch This BEFORE Renting Out Your Property In India! | SEBI Manager Deepak Shenoy on The Neon Show
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Capitalmind founder Deepak Shenoy joins host Siddharth Ahluwalia on The Neon Show to dissect the evolution of Indian capital markets, contrasts between private startup valuations and public markets, financial mis-selling, and investment strategies.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. How this is scored →
Siddhartha as informed peer 3.9 Guest teaching 5.3 Guest disagreement 3.1 Siddhartha pushing back 2.9
speaking balance: gold is Siddhartha, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 39:42 Deepak rejects the premise of penalizing influencers without malicious action
Deepak vehemently disputes Siddharth's push to ban unlicensed influencers, arguing that giving opinions is protected free speech and that buyers bear personal responsibility unless front-running can be proven.
Hardest push from Siddhartha ▶ 40:27 Siddharth presses Deepak on the licensing and qualification of influencersSiddharth refuses to accept Deepak's free speech defense, directly questioning whether a mega-influencer like MrBeast has any legal qualification or fiduciary license to steer millions into assets.
Biggest teaching moment ▶ 10:09 Deepak disproves the modern stock trading boom narrative using historical dataDeepak dismantles Siddharth's assumption about retail trading growth by showing that stock trading volume was significantly larger relative to GDP in 2007 than it is today.
Siddhartha holds their own ▶ 22:09 Siddharth provides direct founder insights on CaratLane's compounding journeySiddharth demonstrates deep ecosystem knowledge by sharing private details from his interview with CaratLane's Mithun Sacheti regarding Rakesh Jhunjhunwala's compounding advice and Tata buyout dynamics.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Siddhartha as informed peer | Guest teaching | Guest disagreement | Siddhartha pushing back | Why |
|---|---|---|---|---|---|---|
| Deepak Shenoy's Entrepreneurial Journey and Capitalmind's Growth | 2 | 2 | 1 | 1 | Siddharth initiates the conversation with basic questions about Deepak's career, bootstrapping, and fund returns. Deepak clarifies his history managing money and explains the regulatory capital requirements for setting up a mutual fund. | |
| The Evolution of Indian Trading Infrastructure and Technology | 3 | 8 | 4 | 3 | Deepak firmly dismisses Siddharth's premise that UPI was the core catalyst behind modern discount brokerages like Zerodha. He delivers an extensive history lesson showing that trading volume as a percentage of GDP peaked in 2007 and credits Reliance Jio, online KYC, and the FT-NSE software rivalry instead. | |
| Indian Startup Exits, CaratLane Acquisition, and VC Dynamics | 6 | 4 | 2 | 4 | Siddharth brings strong domain knowledge and insider access, citing his direct interview with CaratLane founder Mithun and analyzing Tata's buyout strategy. Siddharth pushes back on Deepak's assertion that Reliance pays acquisitions fairly, prompting an analytical breakdown of distress buyouts. | |
| Valuation Discrepancies, Cyclicality, and Corporate Governance | 4 | 7 | 3 | 2 | Siddharth cites Tracxn's public valuation, but Deepak corrects his revenue-only valuation methodology by factoring in down-cycle tech spending and SaaS license culling. Deepak contrasts the scrutiny of related-party transactions in public markets against lenient private VC governance. | |
| The Rise of Financial Influencers and Banking Mis-selling | 5 | 6 | 6 | 6 | A vigorous debate where Siddharth challenges Deepak on unregulated financial influencers misleading retail followers, using MrBeast as a test case. Deepak passionately defends free speech unless followed by provable market manipulation, arguing that bank relationship managers mis-selling toxic ULIPs deserve far stricter penalties. | |
| Real Estate Horrors: Deepak's Tenancy Eviction Ordeal | 1 | 3 | 1 | 0 | Deepak narrates a personal horror story of trying to evict a delinquent tenant who stopped paying after one month, requiring two years of court hearings. Siddharth listens empathetically as Deepak explains why physical real estate is an inferior investment compared to public equities. | |
| India vs Global Stock Markets and Startup Listing Dilemmas | 6 | 7 | 5 | 5 | Deepak dismisses private tech valuations like Flipkart's forty-billion-dollar price tag as private market illusions that public markets reject due to investor ratchets. Siddharth defends the legitimacy of Walmart-backed valuations and introduces Sanjeev Bikhchandani's philosophy of never selling public winners. | |
| The Superiority of Permanent Capital in Public Investing | 4 | 6 | 2 | 1 | Deepak breaks down the strategic power of permanent capital held by holding companies like Berkshire Hathaway and Info Edge versus temporary capital in PMS and VC funds. He explains how mechanical index rebalancing forced passive funds into an immediate fire sale of newly spun-off Jio Financial shares. | |
| SME Exchanges for Startups and Episode Conclusion | 4 | 5 | 4 | 4 | Siddharth questions the utility of SME exchanges for startups given high volatility and illiquidity. Deepak challenges this view, arguing private startups already suffer from total illiquidity and highlighting SME platforms as viable paths for secondary employee liquidity and structured VC financing. |
Statements from this episode (21)
Shenoy: Failed Founders Now Get Better Jobs Than Career Corporate Employees
“Earlier, if you failed as an entrepreneur, nobody will do your job. Now if you fail as an entrepreneur, you're more likely to get a better job than otherwise.”
Shenoy: Capitalmind Must Raise Capital to Meet SEBI Mutual Fund Rules
“We will need to raise some money soon because we are applying to be a mutual fund. And the requirements have just gone up from 50 crores to one 50. So we would have met the 50 crore limit, but we won't meet the one 50. So we'll have to raise external capital”
Shenoy: My Personal IRR in Capitalmind's PMS Is 19.85% Net of Fees
“Right now, I have personally invested in the PMS myself. So, my own IRR is, 19.8 five percent as of net of everything. This is net of fees not net of taxes.”
Shenoy: Indian Stock Trading Volume as a % of GDP Peaked in 2007
“In 2006, if you believe it, as a percentage of GDP, more stocks were traded in 2007 than they are now.”
Shenoy: Reliance Jio Was the Primary Catalyst for India's Digital Trading Boom
“The real thing that changed for India and not just trading pretty much everything was one company. And while I own it, it's Reliance Jio. They brought cheap and very, very quick, big bandwidth to India at a relatively easy availability and easy low price.”
Shenoy: India's Options Trading Market Is Now 500 Times Its 2006 Size
“The options industry today is at least 500 times what it was in 2006, undoubtedly.”
Shenoy: India Has the World's Cheapest Stock Trading and Payment Systems
“India has the cheapest stock trading in the world, and the cheapest payments systems in the world.”
Shenoy: Zerodha Survived Its First Three Years Using Free NSE Trading Software
“NSE decided to take Omnisis and make it free for all brokers. So for the first four years, Zerodha did not need to build front-end software at all, because they got it free from the exchange, not four years, maybe three years.”
Shenoy: Taking 50% Corporate Investment Locks Startups Into a Single Exit Path
“If you have 50% investment from a company, then that company becomes your exit. Unless that company is an investment company.”
Shenoy: VCs Prefer Merging Struggling Portfolio Companies Over Taking Distressed Valuations
“What happens is then VCs also will prefer to merge their companies rather than sell at a distressed valuation.”
Shenoy: Private Market Investors Ignore the Conflicts of Interest Public Markets Scrutinize
“So in a private market transaction, you may not look at the things in the same angle. You don't look at conflict of interest in the same way public markets do”
Shenoy: Financial Regulators Should Only Penalize Influencers for Provably Malicious Actions
“I think the action needs to be justifiable justifiably malicious or provably malicious.”
Shenoy: Bankers Who Mis-Sell Toxic ULIPs to the Elderly Should Face Jail
“This ULIPs and all that shit, the stuff that is toxic and sold by old people, that should require a jail term. Because now you are acting maliciously. You are making a commission for your commission and that is a bad thing.”
Shenoy: Buying a House Is Personal Consumption, Not a Real Estate Investment
“I'll buy a house for my own living. But that's like buying a car. It has nothing to do with investment. But you ask me to invest in real estate, I won't. So I won't buy a house to rent it out and all that stuff.”
Shenoy: Apple and Amazon's Combined Market Cap Exceeds All Indian Listed Companies
“Add Amazon and Apple. The market caps are greater than all of Indian listed companies combined.”
Shenoy: Public Valuations Are Structurally Lower Because They Lack Private Investor Rights
“Public market valuations will always be lower just to compensate for that effect unless your company is so good that they are saying ki, you know, I love it.”
Shenoy: Info Edge Possesses Permanent Capital Through Its Public Holding Company Structure
“Sanjeev Bhikchandani also has now what is called effectively permanent capital. Because he has the ability to say, I will raise money as an awkri and give you shares. Of Naukri. I will take that money and do something with it. If you don't like what I do with …”
Shenoy: Chinese Workers Blocked Apollo Tyres' Acquisition of Cooper Tire in 2013
“Apollo Tires wanted to buy a company called Cooper Tires in 2015. Cooper Tires biggest plant was in China. They said, you brought Indian. Of course, not in Hindi, but if you bring an Indian, I will not let you enter my factory. They refuse to enter, allow Coop…”
Shenoy: Mandatory Index Fund Selling Drove Jio Financial to Lower Listing Circuits
“Geofinancials is a de-merger from Reliance Industries. Reliance Industries is 10% of India's index. Index funds that hold Reliance Industries got free shares of Geofinancials. Geofinancials will not be in the index. So all these index funds have to sell. The i…”
Shenoy: Capitalmind Avoids SME Exchange Stocks Due to Illiquidity and Client Redemptions
“No, because SME doesn't have liquidity. It doesn't make sense for a company like ours, where we offer liquidity to our customers. I can't offer them and then have companies which I can't sell in a day.”
Shenoy: VCs Should Push Portfolio Startups to List on Indian SME Exchanges
“My funda is, in fact, a VC should go and tell companies, please list on the SMA exchange. I will buy your shares on the SMA exchange. After that, if there is no liquidity, it will come one day. Your e-shops, your employees can sell on the, this thing exchange.”