The Impressive TimesNew Delhi, September 9: Indian-American academic and valuation expert Aswath Damodaran has said that while Indian stock markets are overvalued, the country’s real estate sector is even more inflated. Speaking to NDTV Profit, the NYU Stern School of Business professor noted that rising wealth in India has few safe investment avenues, forcing money into equities despite high valuations.
“The country is getting wealthier. The wealth has no place to go but into Indian stocks. What exactly are you going to do? Will you buy Indian real estate which is even more overvalued?” Damodaran said.
He explained that his valuation models, including P/E ratios across global markets, showed India ranking at the top. Despite this, he ruled out an immediate correction, attributing sustained highs to institutional investors’ fear of missing out on the Indian growth story.
Damodaran also highlighted the surge in property prices, with recent surveys showing residential values rising over 50 percent in just two years. According to ANAROCK’s H1 2025 Consumer Sentiment Survey, more than 81 percent of home seekers expressed concern over affordability, while 92 percent were dissatisfied with project locations.
India’s most valuable real estate firms now collectively command a market worth of ₹16 lakh crore — more than the GDP of some smaller nations, as per the 2025 GROHE-Hurun India Real Estate 150 report.
On foreign investor behavior, Damodaran remarked, “FIIs simply chase returns. You have two good weeks in the Indian market, they’ll be here really quickly.” He also advised domestic investors to focus on long-term index investing, avoid speculative bets, and reduce excessive trading activity.
In lighter remarks, Damodaran compared global leaders to stocks, calling former U.S. President Donald Trump “a high-risk, extremely volatile stock,” while describing Prime Minister Narendra Modi as reflecting India’s growth story.
Despite concerns over overvaluation, Damodaran noted that healthcare remains a promising sector in India, offering long-term growth potential.
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