Adani Group moves mountains to ensure that the FPO sales and it did through but they have decided to return the FPO proceeds. What do you think has triggered this move? What do you think could be the thought here?
To be candid generally it is very difficult to predict how a particular entrepreneur is thinking and what is their board thinking. The only message for market is very confusing. It lacks clarity and the market hates uncertainty. Clarity is needed. If you keep changing a strategy and that is where the market does not like. I think that is a reaction which you are seeing in the market but again these sort of things we have seen n number of times in various point of time.
In the past 30 years I have seen many such moments but as long as the group is backed by assets and other things I think this is temporary phenomenon, it can come back.
But ultimately it affects market sentiment and which is the case in the current environment but let us focus on the good things. The budget is obviously very constructive. All the concerns which we had about the capital gain changes have been addressed.
I think sometimes you get a buying opportunity also, we are seeing a good amount of capitulate move happening because of this event unfolding. I think real capital happened on the side of I think the banking side where our data and the Quant Capitulation Index has spiked significantly. So it clearly indicates that in the next one or two trading sessions, bank should bottom out.
Such events sometimes gives you extraordinary buying opportunity in the sectors or stocks which you like. So I think banking is another opportunity and given the physical discipline the budget has showcased along with the growth momentum I think it is an opportunity from the market because India both from a structure and long term looks very good to me. So these are great opportunities to accumulate the stocks you want to build in your portfolio.
Tell me what happens to the Adani Group of stocks now that the FPO has been called off because you know speculation has been rife in the market that considering share price is much below the FPO price now maybe people would jump in to buy into the considering stock the long term growth prospects of the Adani Group and especially Adani Enterprises continues to remain intact. But there is the other theory also considering the group was already very highly leveraged, there is already that pressure of foreign investors selling into Adani bonds whether the stocks are going to crack further what do you think is going to really happen with the Adani stock shareholders now, what should they expect?
Generally we do not comment on stock specific things given this noise which is there. I think the sentiment definitely has been affected but we have to and everyone has to take a call, whether these stocks are or some of the stocks are backed by assets and cash flows or not.
So it is not like the entire basket is bad some of the names are very-very good in that so it is up to the individual and every portfolio manager how they perceive as whether it is an opportunity or whether people think other way.
I will look this as a buying opportunity for the market in general. I do not see any crisis for any of the banks, whether it is a private sector or a public sector. I will use this as an opportunity to buy banks so if I have to really conclude instead of getting in particular stock specific thing I think the much larger call will be to participate in the banking names which has corrected significantly. Everybody in general who has been positive about the credit off take which is happening and budget is also supportive in that direction so I think it is a right sign to increase our banking exposure.
I am just going to close it up with one final question on the budget. There are two casualties on the budget if I look at the budget fine print. First is insurance and second is luxury housing. There are almost six insurance stocks listed. Insurance stocks yesterday really got cleaned out. What is your view there given that you do have exposure in some insurance stocks?
To be candid yes it was the big blow that the first market reaction has showcased is bad. We have to keep in mind that from a longer term perspective the way India and disposable income is growing both insurance as well as mutual fund industry are sunrise industry.
So there can be a small setback on an immediate basis again. We are talking about only the premium segment above Rs 5 lakh or so. There is a psychological impact, there will be some amount of earning impact as well. But given the opportunity and the potential which it has from a longer term perspective I think I should be a buyer in these names if it corrects further.
It is a knee jerk reaction which is happening. But I will look for a buying opportunity in the insurance space also because these are all the best of the companies which are available at good values.
firstname.lastname@example.org. The content will be deleted within 24 hours.
You must be logged in to post a comment.