What do you make of the markets with this steady move coming in despite all the taper talks?
It definitely has to do with the global markets recovery. The Indian market has started taking cues from global market recovery and at the end of the day, the feeling which global markets and analysts are putting forth is that the taper tantrum is not going to be as severe as it was in 2013. Lots of liquidity has been injected into the global markets by the central banks across the world — not only the US Fed, but also the central banks of Europe, the UK, Japan and China. Even domestic policies in India have been liberal.
So the liquidity is not going to disappear. Yes there is a tapering on the cards but if we have a favourable statement from the Fed chairman at Jackson Hole tomorrow or day after, things can quickly turn around even from here. What the market hates is uncertainty. If there is a specific timeline and quantum specified by the Fed chair, markets will take it positively and move on from there.
How are you reading into the National Monetisation Policy which got announced late last evening? What does it spell for infrastructure as a pack given that it is a Rs 6 lakh crore infrastructure package which got announced? Would you say names like L&T or perhaps the large cement plays are the best selected to play this entire theme?
Looking at the assets they are talking about deploying for this entire scheme, what comes to my mind is certain categories of assets like railway stations, ports and stadiums. A lot of work needs to be done before there can be any kind of monetisation or structure created for extracting value out of these. The other bunch of assets like the airports and the roads are ready. There is a template. There is a model. Things have happened in these sectors and they are to an extent lucrative.
If we narrow down the kind of action to these roads as well as airports, the companies which will benefit out of them will be the infrastructure and construction related companies. The BOT model has been in a way a boon for the infrastructure players because they have been able to operate, extract value and surrender the assets after a certain time. There is a demand for airports. So, the airport operators should be looked at because this will provide an opportunity.
The construction infrastructure majors like Larsen will definitely benefit. I am not very sure about the cement demand going up or the cement players benefiting straight away out of this scheme. The corollary to this is the government generating money out of these schemes will go into infrastructure build, will go into construction and that will benefit cement companies.
