I want to get your take when it comes to Godrej Agrovet and the kind of trend that we are seeing in the consumption space. Would you be looking at this as an opportunity or do you see this just as a momentary reopening buzz that we are seeing across the counter?
I am not tracking Godrej Group or Godrej Agrovet. But there has been debt reduction across the spectrum. A lot of companies on the consumption side have underperformed the broader market. On the agri side, some companies have started to do well in the last couple of months. The rally will continue in the so-called under-owned stocks. These stocks can see good buying interest in the future because fundamentals and consumption patterns are changing.
At the current juncture, where do you find Kotak Mahindra Bank vis-à-vis its peers?
I think there is a clear choice in terms of owning private banks, and that too a couple of large private banks. The two choices that naturally come to mind, not only in terms of surety of growth but also in terms of reduction in NPAs as well as good asset quality and sound managements, are HDFC Bank and Kotak Mahindra Bank. They are part of a majority of our portfolios.
There is no reason that why one should ignore Kotak Mahindra Bank. It has underperformed in the last one or two quarters as compared to its peers. It is slated for excellent numbers in the next 1-2 years once the recovery trade starts. On the retail deposit side as well as on the corporate side, banks have cleaned their books. There is no reason why Kotak Mahindra Bank should not be one of the frontrunners in terms of performance. Of course, there are a couple of other banks on the corporate lending side like Axis Bank and ICICI Bank which would be a more appropriate play on the capex recovery side. One should place their bets on these top four banks.
What do you think is on top of mind of investors when it comes to Reliance?
I think investors and market participants want almost everything and anything from the AGM. For four or five months last year, when the market was underperforming Reliance did exceptionally well. It was a laggard in the last couple of months and then it picked up again.
There are a lot of expectations from the AGM. Investors expect clarity on the demerger part and how Jio and the retail business would unlock value. These two are the new-age businesses. People are anticipating clarity on how Jio would be demerged in the long-term, its listing, the Aramco deal, how the petrochemicals division has shaped up of late and on the GRM. The market is anticipating a lot of things but these are all speculations.
Sona Comstar and Shyam Metalics listed today. Do you like them?
We did not have a rating on both these IPOs. Shyam Metalics had garnered good response, whereas Sona BLW had a very lukewarm response from the HNI community and QIP investors.
Around 17 to 18 DRHPs have been filled with SEBI. These are quality IPOs. There is a scarcity premium for such IPOs. I am not talking about the companies that got listed today. But companies in the IT or IT-enabled services domain that listed last year have some core competence and market leadership.
The response will be good this year as well for companies like Paytm or IT companies or those in metals. There is a lot of appetite for quality papers.