You represent a HNI and an ultra-HNI crowd. What are they buying?
Given the kind of up move that we have seen in the markets, there is a lot of appetite for the midcap and small cap companies. We have been covering a few of them and retail in particular has a fancy for stocks which have a low absolute price compared to valuations. That is something we are seeing as a major trend particularly from smaller retail clients or clients who have come into the market for the first time.
So, within the midcap space, we have been liking companies like Indian Energy Exchange or Crompton Consumers, Havells some of the PSU names like Bharat Electronics, GAIL because that sector again is in the limelight and the absolute prices are not too high with some of them offering very high dividend yields as well.
The second category to witness very good appetite and excitement are IPOs. The last three-four IPOs have been superhit in terms of the listing as well as the kind of upside that we are seeing and 2021 is a year where there is such a strong IPO pipeline that you know there is going to be a lot of excitement from retail participants and even from HNIs. They are looking for some good funding deals. Overall compared to the largecaps, where the typical large investors would have a holding from a momentum in retail participation point of view, these are the two areas where we are seeing a lot of excitement midcap, small cap and IPO.
Which are the stocks you are telling your clients to buy?
Housing Finance is one sector. Given the uptick that we are seeing in the real estate names and the entire ecosystem around housing, even the Budget could be an important factor and we think these housing finance companies can do exceptionally well.
We have seen a very good up move in HDFC, LIC Housing and recently we have initiated a coverage on Can Fin Homes which typically lends only to the salaried class and it is far more smaller in terms of size and valuations. This is one space where we are exceptionally positive because a) it is a leverage play, b) you have a very strong visibility and because of the kind of development which have happened in the last two years where companies like Dewan Housing and to some extent Indiabulls has gone through the pain, the markets share gain and the overall growth for some of the other companies have been much much higher. This is one space where we are exceptionally positive on the names like LIC Housing, Can Fin Homes, HDFC etc.
