Good to see newer companies getting listed, but need to be selective: Dinshaw Irani
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Synopsis
Our belief is that going forward, it will be the finance segment which has been not doing too well of late because the heavyweights are not doing too well. But as I said that, it is mainly because of the liquidity constrain in the market today that they are not able to perform so well. I think RBI also cognizant of the fact that maybe we will see some kind of easing of liquidity in the near future, so that should help the banking sector
I will not comment on the individual IPOs which are coming by but one thing I want to comment on is that obviously when markets are running high every day you will see newer, newer IPO's. You got to be very selective with those, you just cannot be going and buying any IPO which comes.
Maybe it will give you a pop but on the longer term, we are going to be very cautious. So you have got to really analyse. My analysts have not highlighted any of the IPOS, which have come by of late. And that is why we are keeping a close watch on that market also, however, it is a very healthy thing to see newer companies getting listed because they normally add to the market cap and they also, get in new investors in a way because the way the markets are today, there are quite a few on the sidelines.
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Which part of your portfolio gives you smiles every morning? You bought at the right valuation, earnings growth is not stopping by, valuation expansion continues to happen?
Actually, a big chunk of my portfolio has not been doing too well. I am talking about banking sector per se, but our belief is and in fact, that is the beauty of our portfolio that despite big chunk not doing well, we are constantly outperforming the index and it is all across our offerings, not only domestically, but also, FPI that we are running where we are advisers, so we are doing fairly well there also.
So the point is that you will have these pockets, basically you are trying to when you develop a portfolio, you are trying to get a relay team in place, where when one set of leaders are tiring out the other set takes over the baton on and start leading the pack. So that is what we try to do and I think we have found that mix and match.
Stocks Recommendations
I certainly would. I also believe that RBI has been fairly proactive in managing not only the inflation but also the rupee dollar rate as such. And I think that has led to a lot of comfort in the FPI segment also.
Domestics have been fairly gung-ho all along. The FPIs who has turned bullish and fortunately for us, China has been doing badly. And that is where the real flow is coming from, as such for India. So I do not see that being a problem there. And that is why I believe that RBI is in the right place and I think they are doing the nuances in the market as such.
So basically, the point is that in consumption, you need both the engines to kick in. As I said that maybe rural is picking up, but urban now the indication that it is slowing a bit. So I get a feeling that both have to kick in before it picks up.
Some of the companies that you mentioned earlier also have done well because of the offshore business doing well as such. And there are huge chunk of offshore businesses which have done fairly well. So I do not see the domestic FMCG space doing much going forward because one, the valuations are too high. And the second part is, inflation. And obviously the purse strings are becoming tighter for the consumer, so it is more or less, even-steven right now.
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