'Taking the easy way out': Uday Kotak slams Gen Z, urges them to build businesses, not just manage wealth

Business tycoon and renowned banker Uday Kotak has openly raised concerns over the 'decline' in India's economic 'animal spirits,' warning that an increasing number of young tycoons are prioritising investment management rather than focussing on entrepreneurial ventures.

Kotak, who was speaking at the Chasing Growth 2025 investor event, highlighted the risk of a weakening entrepreneurial drive and called for strategic policy intervention to counter capital outflows exacerbated by U.S. economic policies.

Young Entrepreneurs Opting for Investment Over Business Creation

Kotak, who is the founder of the Kotak Mahindra Bank, expressed his deep unease over the shifting mindset of young business successors, who, instead of building businesses, are focussing on managing family wealth.

"What concerns me is that many in this generation are taking the easy way out, especially in the post-Covid world. They claim to be managing family offices and investments," Kotak said.

He urged young entrepreneurs to engage in business operations more acutely rather than limit themselves to investments. He noted: "If someone has sold a business, they should be thinking about starting, buying, or building another business. Instead, I see many young people saying, 'I'm running my family office.' They should be creating real-world businesses. Why not start from scratch?"

Kotak even questioned why individuals in their mid-30s and 40s were not contributing more directly to the economy.

"I would love to see this generation be hungry for success and build operational businesses. Even today, I firmly believe that the next generation must work hard and create businesses rather than becoming financial investors too early in life."

Stock Valuations, Capital Flight, and a Strong Dollar

Kotak also warned of the risks posed by India's high stock valuations and the increasing trend of foreign institutional investors (FIIs) pulling out funds.

"Should we continue encouraging retail investors to keep buying? Retail investors in India are funnelling money into equities daily, contributing to domestic institutional flows. Money from individuals from Lucknow to Coimbatore is flowing to Boston and Tokyo," he noted.

He pointed out that foreign investors have been capitalising on high valuations to book profits and repatriate funds. The strong U.S. dollar, he explained, is accelerating this capital flight.

"The US dollar is acting like a vacuum pump, sucking capital out of emerging markets," Kotak said, referencing the impact of rising U.S. Treasury yields surpassing 4.5%. Indian stock valuations remain significantly higher than those in most global markets.