'India Inc to See Record Fundraising in FY22'

In an interview, the chief strategist of Ashika Group spoke of the impact of the Covid-19 pandemic on the market, and also threw light on ‘euphoria’ marking the present IPO scenario in the country.

With the market recently forming a fresh top, do you think it has put aside fears of a third Covid wave? What other factors are at play right now?

As of now, the market is a mix of greed and fear. Retail clients are too bullish on markets, while institutional investors are conservative at this point. FIIs are selling continuously for the last five months, neutralised by DIIs till date. However, the upward movement of the market is primarily driven by a booster dose of liquidity by retail and HNI clients. Globally, the vaccine drive is happening at a very fast pace, and hence, as of now the Covid-19 virus looks out of the market – however, that is certainly an overhanging risk, keeping the delta plus variant in mind. The only advice to investors as of now is to keep booking profits at every up-move from here on, unless you are in undervalued sectors or stocks. 

How are FIIs looking at the market?

As of now, FIIs are cautious to invest at the current level of the market. On broader terms, I can say they are mildly bearish as compared to their year-beginning stance. Also, they are watching closely the Vodafone India debt situation, and its possible impact on the Indian banking system. After a very long time, we have seen delinquencies in the retail loan books of banking sectors, which may be the cause of concern at least in the short term for FII’s and other institutional investors.

Which sector/stocks will fall in the category of disruptors?

For investors, IT (AI-based companies), the automobile, pharma, and specialty chemicals sectors will create multi-baggers in the ongoing decade. Also, most of the new-age and oligopoly businesses in telecom, rating agencies and green energy sectors will create multi-baggers at this point in time.

IPO season is back! Zomato recently went public, Paytm and LIC are to follow the suit. Do you think the primary market will see record fundraising in 2021? What are big issues lined up in the coming period?

As of now, there is euphoria in IPO Market as most IPOs are generating an absolute ROI of 40 to 100 per cent on listing day. In my personal view, FY2021-22 may record fundraising by Indian corporates, as now Indian investors have accepted new-age business models as part of their investment portfolio. These new-age business models like Paytm, Zomato, Mobikwik are globally-accepted business models, which focus on market share for an initial ten to fifteen years of their existence, and then become market leaders to dictate terms and pricing of the products and services. As of now, we have a big queue for IPOs like NSE, LIC, OLA, OYO in addition to the above-mentioned IPOs.