How do you read into the IPOs that have hit the markets since the beginning of 2021?
It has been an exciting time for the IPOs but because too many IPOs have come in a very short span of time, it is taking out liquidity. Also some of the managements are becoming a bit greedy in terms of the price at which they are offering and which is why we are seeing that despite the excitement in terms of the subscription, the listing gains have not been that strong for many of them.
It makes more sense to go stock specific. Something like MTAR or Nazara are very niche with business opportunities. One can look at allocating small components of their capital because typically in a bull market, some of these companies can give multi-bagger kinds of returns. But it requires a lot of understanding of the company in which you are taking that kind of call. So stay selective. There are a lot of opportunities to be availed of and make smaller allocations. Do not get too aggressive in terms of how much you are investing into a particular IPO.
How was FY21 for you? What were some of the good market calls and bad market calls?
After seeing the circuit down and the kind of panic which was there in March last year, most optimist people would not have thought such a big rebound was possible in the markets and more importantly in the earnings. It would have taken some time for everyone to fathom that there can be a revival amidst all this corona crisis. After about a couple of months, people could sense that we are seeing a bit of flow coming into the market and there is a revival happening.
Many people would have missed the initial part of the rally but what is important is the broad- based revival that we are seeing across sectors and confidence coming back. For us, the biggest takeaway was the way retail participated with so much gusto and euphoria and more demat accounts were opened. We are all positively surprised by the retail participation and the revival that we have seen in the market.
Theoretically a correction in crude prices should be good news for us?
Yes, it will be good news because if crude price goes beyond $65-70, it could start affecting our overall sentiment and the inflation part would come into play. But we have to also reckon that a large part of this rally is because of the way the commodities have turned positive and that could bode well for the liquidity flow. One cannot draw a very clear-cut view from this. But since crude price had gone up so much, a small correction would be taken positively.
