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lic ipo: LIC, Adani Wilmar, NSE and OYO among 75 IPOs to watch out for in 2022

New Delhi: The primary markets saw 2021 as a historic year and are contemplating 2022 on similar lines, with a long queue of companies eyeing to make their Dalal Street debut.

 As many as 75 companies are in the IPO pipeline, with 37 having valid observations from Sebi and the remaining 38 awaiting market regulator’s go-ahead after filing their DRHP, suggests a report from Axis Capital.

 Even in the March quarter, 23 companies are looking to collectively raise nearly Rs 44,000 crore through initial share sales, of which a significant chunk will be garnered by technology-driven companies.

 “We foresee moderation in the primary market in terms of numbers of offerings,” said Vinod Nair, Head of Research at Geojit Financial Services.

 However, the IPO market will be supported by the government’s divestment plan, start-ups and new growth in the economy, he added. “Going ahead, investors are expected to be choosy in terms of quality and pricing of IPOs.”

 However, investors are keenly waiting for the issues of some of the most buzzed names, including the insurance behemoth Life Insurance Corporation of India (LIC).

 LIC is the most awaited issue this year, but the company has not filed its DRHP yet and it requires ample clearances and regulatory approvals before knocking on the doors of the primary market.

 Even for the government itself, LIC’s IPO holds paramount importance. The Centre is eyeing to raise to Rs 80,000-1,00,000 crore, a major chunk of Rs 1.75 lakh crore divestment plans, diluting its 5-10 per cent stake.

 The market for primary issuances is likely to be buoyant in 2022, thanks to a strong pipeline of DRHP with SEBI and observations received from the market regulator, said Ricky Kirpalani, Lead Sponsor, First Water Capital Fund.

 “However, the LIC IPO is likely to take the lion’s share of the expected mobilization,” he added. “The recent tepid listings may slow the flurry run, but overall it will be healthy, as long as quality names are available at a reasonable price.”

 NSE is another highly anticipated issue. The largest derivatives bourse and India’s leading exchange is eyeing to raise Rs 10,000 crore via the share sale.

 The company’s shareholders include several prominent names such as State Bank of India (SBI), LIC, IFCI, IDBI Bank, Goldman Sachs, Stock Holding Corporation, Tiger Global and Citigroup, among others.

 Adani Wilmar, the joint venture between Adani Group and Singapore’s Wilmar Group, is likely to raise Rs 4,500 crore via IPO route for capital expenditure for expansion of existing manufacturing facilities, which will entirely be a fresh issue.

 After the success of, and PB Fintech, homegrown start-ups will continue to launch their mega issue for the investors in 2022. Oravel Stays (OYO), Delhivery and PharmaEasy will hog the limelight this year, as they eye to raise to Rs 22,150 crore via IPOs.

 Apart from these, Snapdeal, Droom Technology, LE Travenues Technology (Ixigo), Ola, One Mobikwik Systems and Byju’s are some of the key start-ups lined up to raise fresh capital via the primary route.

 However, the majority of start-up IPOs have been mega-sized issues as they provide an exit to a large number of existing investors and promoters to offload their stake.

 “Our start-up ecosystem, already the 3rd largest in the world, too, will continue to flourish. We have already seen several start-ups attaining unicorn status this year and believe that it is a trend that will continue in 2022,” said Ravi Kumar, Co-Founder & CEO, Upstox.

Among the traditional businesses, investors will be keenly awaiting the IPOs SBI Mutual Funds and Bajaj Energy along with VLCC Health Care, Sterlite Power Transmission, Tracxn Technologies and Go Airlines.

 Emcure Pharmaceuticals, Vedant Fashions, Paradeep Phosphates, Medanta, Seven Islands Shipping, Aether Industries, Five Star Business Finance and Vedant Fashions (Manyavar) are expected to float their initial share-sales.

 India will continue to be an attractive destination for investment as the macroeconomic parameters remain stable, and will continue to support consumption and investment, said Kumar of Upstox.

 “A large untapped market, favourable demographics, rising financial literacy, increasing smartphones and low-cost internet penetration will continue to boost equity participation,” he added.

 In 2021, 63 companies raised about Rs 1.20 lakh crore through their initial stake sales. Apart from this, a couple of REITs and InvITs raised more than Rs 11,500 crore during the year.

 The record funding for companies comes despite weak market sentiment arising from the nationwide Covid-19 lockdown in the first half of the calendar year.

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Nykaa’s Anchor lock-in period ends on December 8? share down by 3.9%

After a bumper month for the primary market, recent listings, including Nykaa’s, may have to face some reckoning in December as the regulatory one-month lock-in period for anchor investors begins to open.

According to an Edelweiss Alternative Research report, 10 IPOs raised over RS 36,000 crore in November, and starting December 8, anchor lock-ins will start to loosen. 

Historically, newly listed companies see selling pressure once the anchor lock-in period ends. For instance, as many as 76 percent of issuances whose lock-in periods are behind this year, experienced selling pressure on the anchor lock-in opening dates. 

The average decline among these stocks, including IRFC, Indigo Paints, Home First Finance, MTAR Tech, Easy Trip Planners and Craftsman Automation, was 2.6 percent, according to the report. And after five days of the anchor opening date, 61 percent of the issues were trading 3.9 percent down on an average.

Of this, Easy Trip Planners and Zomato saw a sharp fall on the day of the lock-in opening of 10 percent and 9 percent, respectively. While the likes of Clean Science and Tech, Devyani International, Ami Organics and others saw about 4-5 percent fall.

 This brings to the fore concerns about how the next batch of stocks will react, starting with Nykaa’s, whose anchor lock-in opens on December 8. Anchor shares make up for about 4.5 percent of total outstanding shares in Nykaa, as per the Edelweiss report.

 Ricky Kirpalani, Lead Sponsor, First Water Capital Fund (AIF), believes the opening up of the lock-in will have a marginal impact on Nykaa’s stock.

 “The reason for this is that most investors look at this as a chance to enter the space without having to come in at IPO level. They tend to have a long-term perspective of the company and are less likely to cash in or flip their investment,” he said.

 Another expert said that anchor investors do not always exit immediately after a lock-in, so as not to put pressure on the stock. Even if they do, it gives other investors an attractive opportunity to invest in the stock.

 “We also believe that those who were looking for an exit partial or otherwise do so at the listing stage. Plus some with larger stakes are more likely to seek negotiated deals,” added Kirpalani.

 Analysts believe the company’s business model is strong and that future growth prospects are intact but rich valuations could play spoilsport for the stock.

 “We believe that it is a fantastic platform and a landmark listing for India Inc. We have a young population and a growing penetration of smart phones and data accessibility. So, websites like Nykaa should hopefully continue to grow, become profitable and one day fulfil its potential,” said Kirpalani.

 “However, for me, companies with fancy multiples which are also loss-making is not something that I would look to invest in. I believe that there are too many assumptions that need to play out to justify its valuation,” he said.

 Similarly, Dolat Capital, in its recent report said Nykaa boasts a rare combination of growth and profitability in the internet space and it will continue to trade at a premium.

 However, it cautioned that current valuations at 19.4/13.7x FY23/24E EV/Sales seem too rich for comfort even after factoring in a long timeframe.

 “In the current valuations, implied expectations leave limited room to err on execution and growth trajectory of the space. The risks of increased competition from some of the large players remain key in our view. Stock supply is another risk,” the note said.

 The research firm has initiated a “sell” with a target price of RS 1,600 at 10x FY24 EV/Sales.

Kirpalani also shared similar concerns. “Will it be able to monetize and not be disrupted or outdated as happens in the tech world?” he questioned.

 IIFL Securities also believes all positives have been factored into the stock.

 The company listed at a premium of 78 percent over its issue price of RS 1,125 on November 10. It then hit a high of RS 2,573 last week but has since fallen to RS 2,141. However, it is still above its listing price of RS 2,001.

 “Nykaa’shas occupied the most profitable customer-product niches, with an average price of RS 450 per item. In our view, it will not want to step too far away from this safehold and hence growth, while remaining robust, would slow down after a few years,” IIFL Securities said in its note.

 “Moreover, a large part of the BPC e-tail space is served by Amazon/Big Basket, which would place Nykaa’s in competition with these players if it steps out of its niche, not to mention increasing competition in the beauty vertical itself,” the brokerage said.

 The other stocks where anchor lock in periods will end this month are Fino Payments Bank, SIS Enterprises, PB Fintech, Sigachi Industries, Paytm, Sapphire Foods, Latent View Analytics, Tarsons Products and Go Fashion.

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Budget 2022: Why infrastructure should be at centre of Nirmala Sitharaman's annual statement

We believe that infrastructure will be at the centre of the Finance Minister’s agenda when she presents the Budget on Tuesday.

 We expect the measures to not only focus on addressing existing bottlenecks faced within the sector but also to provide a further boost to the Public-Private Partnership model. Specifically, we expect that the Hybrid Annuity Model (HAM) used in the construction of roads and water projects etc, to be made more viable for developers and it may be extended to additional kinds of projects.

 Upgradation of port infrastructure expected

 Given the current environment where we are experiencing inflation sparked by rising freight costs and supply-chain inefficiencies, every move that streamlines the time to market will be welcomed. As a part of this, we expect an upgradation of port infrastructure and possibly privatisation that will help improve efficiencies. Likewise, there may be incentives for the warehousing sector that could encourage private investment. This may even cover agriculture, which is currently plagued by inefficiencies owing to the overarching dominance of the Food Corporation of India.

 Railway infrastructure likely to get a major boost

 The railway infrastructure will likely see a major boost with the key themes being modernization, upgradation, and indigenisation. There is also likely to be an increased allocation towards high-speed trains, not only on the passenger side but also on the freight side, with a view to improving the competitiveness of the railways. The Finance Minister may also announce a roadmap for the rationalization of the numerous entities under the Ministry, and perhaps propose some consolidation.

 Incentives for Oil & Gas infrastructure

 Another key area is likely to be Oil and Gas, with attention focused on reviving the Exploration and Production sector, which has been plagued by insufficient investment during the recent downcycle in the oil market. Given the soaring natural gas prices, we could see the Finance Minister fostering a more conducive environment with suitable incentives for Coalbed Methane Blocks and other coal to gas initiatives. This is extremely important, not just to reduce dependence on coal imports, but also to achieve a greener environment. Pipeline infrastructure is also likely to be a focus area, with cross-country pipelines improving India’s strategic oil security. There is likely to be a further boost to city gas distribution projects and coverage may be expanded. But most importantly, industry concerns around certain regulatory aspects, if addressed, could reinvigorate interest in the sector.

 Incremental allocations for Water and sanitation infra

This sector will likely see incremental allocations in line with the already announced intent of the Government, with the laying of pipeline infrastructure accelerating as we move closer to elections.

 Balancing cash flow estimates in telecom sector

 Telecoms is another area where a lot of uncertainty has been removed with the recent Government incentives and concessions. While there isn’t much expected for the sector incrementally, it will be interesting to see how the Government balances its cash flow estimates from the sector, which are likely to be much lower now in the wake of the package announced.

 Concessions for aviation infrastructure

 The aviation sector has faced a lot of challenges due to the pandemic and it is likely that some sort of concession may be offered to players in the airport infrastructure business. However, given that the Government has very limited fiscal headroom, we can’t really expect too much. The only plausible way for the Government to do this is to open the sector to more FDI and encourage more investments.

 Lastly, given the huge investments already committed by the Government to the infrastructure space and the limited number of Engineering, Procurement and Construction (EPC) players who can deliver such large projects, we need an environment that not only provides capital support to developers through models like HAM but also something which enables EPC companies to execute projects with the limited capital resources at their disposal. There is a need for innovative models that can address this if we are to come anywhere close to the stated targets. We would be keen to see if the Finance Minister has anything to offer in this regard.

 The author, Ricky Kirpalani, is Lead Sponsor and Investment Advisor at First Water Capital.

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IPO fireworks in New Year too; firms likely to garner Rs 1.5 trillion

Initial share sales are set to dazzle the Dalal Street in 2022 too as companies are expected to garner up to Rs 1.5 lakh crore in the New Year, continuing with the bullish momentum after 2021 turned out to be the best IPO year in two decades for the Indian market.

Excessive liquidity and increased retail investor participation ensured a persistent euphoria in the Initial Public Offer (IPO) space wherein companies mopped up more than Rs 1.2 lakh crore this year even as pandemic gloom shadowed the broader economy.

 In 2022, the higher amount of funds through the primary market will be largely driven by the mega IPO of state-owned Life Insurance Corp (LIC). Besides, a lot of new-age digital players are expected to explore initial share sales.

All said, the possible impact of the coronavirus pandemic, especially with the emergence of Omicron, might still be a cause for concern.

Venkatraghavan S, Managing Director and Head – Equity Capital Markets at Equirus, said that with interest rates set to move up, there might be some dampening of the current frenzy. “But, we don’t expect a wholesale collapse of the primary market for equities. Any pandemic-related alarms could of course throw a spanner in the works”.

For calendar year 2022, he said that since LIC listing is also expected, it is anticipated that the amount raised through IPOs will be in the range of Rs 1.25 to 1.5 lakh crore. Sandeep Bhardwaj, CEO of Retail at IIFL Securities, said 2022 might see new record funds raised through IPOs and added that LIC is likely to be the mother of all IPOs in India and will also significantly attract global investors’ attention.

India recorded the “best IPO year” in two decades with proceeds worth over USD 16.9 billion in 2021 as ample global liquidity, robust earnings and increased retail participation bolstered the initial share sales space, according to a report by global consultancy EY.

Prashant Singhal, Emerging Markets, Technology, Media, Telecom (TMT) Leader at EY, said this year has seen some of the best performances in the Indian IPO market with new age tech companies leading the way.

According to him, good traction was also seen in diversified and industrial products and consumer products and retail sectors. “Investor sentiment remains upbeat as 2021 comes to a close with strong domestic and global demand and significant momentum going into 2022”. On the flip side, there are voices who feel that 2022 might not be as buoyant as this year and there are also concerns about the pandemic situation.

A lot will depend on market sentiments next year as the uncertainty due to the new COVID variant still looms large on the markets and economy, Piyush Nagda, Head-Investment Product at Prabhudas Lilladher, said.

Ricky Kirpalani, Lead Sponsor at First Water Capital Fund (AIF), said that 2022 may not be as buoyant as 2021 for IPO markets, given how some recent large public issue like Paytm have performed post-listing.

This year, as many as 63 companies have floated their IPOs to raise Rs 1.2 lakh crore, an analysis of data with the exchanges showed. This was way higher than Rs 26,611 crore raised by 15 companies through initial share sales in the entire 2020 and nearly double the previous best of Rs 68,827 crore by 36 companies in 2017.

Apart from the 63 firms, PowerGrid InvIT (Infrastructure Investment Trust) mopped up Rs 7,735 crore through its IPO while Brookfield India Real Estate Trust raised Rs 3,800 crore through REIT (Real Estate Investment Trust).

Companies took advantage of the bullish trends in the stock market as well as excessive liquidity in the system. Also, IPOs of new age technology companies, robust retail participation, and huge listing gains added to the glitter on the Dalal Street amid the broader economy slowly on the recovery path.

“The rally in global equity markets, low interest rates and abundant liquidity due to the easy monetary policies of global central banks has aided in impressive fund raising through the IPO,” Sameer Kaul, MD and CEO of TrustPlutus Wealth (India), said. Samir Sheth, Partner and Head of Deal Advisory Services at BDO India, said a bunch of new age digital companies got listed in 2021 providing not only an opportunity for retail investors to invest but also an opportunity for some of the early-stage investors to make an exit. For instance, food delivery company Zomato’s IPO was subscribed by over 38 times. Many other technology-led businesses, including One97 Communications (Paytm), FSN E-Commerce Ventures (Nykaa) and PB Fintech (Policybazaar) took the IPO route of raising funds.

The largest IPOs were the One97 Communications that had an issue size of Rs 18,300 crore, followed by Zomato at over Rs 9,300 crore. The average issue size was a high Rs 1,884 crore this year.

IPOs of more than a dozen companies, including Data Patterns (India) Ltd, Tega Industries, Go Fashion (India) Ltd Latent View Analytics, MTAR Technologies, Devyani International, Rolex Rings, Tatva Chintan Pharma Chem and Nazara Technologies, got subscribed over 100 times. The year witnessed spectacular response from retail investors and the average number of applications from retail was 14.36 lakh, in comparison to 12.77 lakh in 2020 and 4.05 lakh in 2019. 2021 also saw majority of the IPOs opening with a premium over the issue price suggesting strong investor appetite.

Paras Defense and Space Technologies, Clean Science and Technology, Macrotech Developers, Laxmi Organic Industries, MTAR Technologies, Easy Trip Planners, which got listed in this year, are trading above their issue price, giving smart returns in the range of 156 to 292 per cent, since listing.

“Due to the vibrancy in both the private and public markets, there is an increased play of investing on the private side and exiting on the public side as can be seen with a bevy of PE-backed IPOs in recent times (over 70 per cent of IPOs this year have been PE backed),” Satyen Shah, MD & Head of Investment Banking at Edelweiss Financial Services, said. Going into 2022, Eklavya, founder of trading platform Recur Club, said that as long as central bankers maintain an accommodative stance, public equity markets valuation will remain firm which will provide confidence to the IPO market.

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India Inc raises over Rs 9-lakh crore through equity, debt issuances in 2021

Indian companies have mopped up more than Rs 9 lakh crore through equity and debt routes in 2021 to meet their renewed thirst for business expansion in a buoyant stock market brimming with liquidity and helped by recovering macroeconomic indicators after pandemic-ravaged first few months. Unless the still-evolving Omicron situation plays spoilsport, the next year is expected to be much more robust in terms of fund-raising activities and there seems to be no dearth of funds, experts said.

 ”The banks have been sitting on surplus liquidity for quite a while and there should be enough appetite for quality borrowers, said Ricky Kirpalani, Lead Sponsor, First Water Capital Fund. In the year passing by, fund mobilization through debt markets has fallen sharply, while the equity fundraising has been robust and the stock market bull-run with liquidity all-around has resulted in record fund-raising through initial public offerings (IPOs).

 Despite the plunge in fund mobilization through the debt route, it continued to contribute a lion’s share to the overall fund-raising activity in 2021. Debt fund-raising has slowed because of long-term economic disruptions during the first wave of the coronavirus pandemic, followed by a prolonged impact of the ravaging second wave, said Sandeep Bhardwaj, CEO, Retail, IIFL Securities.

 Out of the cumulative Rs 9.01 lakh crore garnered till mid-December this year, funds totaling Rs 5.53 lakh crore were mopped up from the debt market, Rs 2.1 lakh crore came from the equity market, Rs 30,840 crore through REITs and InvITs, and Rs 1.06 lakh crore via the overseas route, data compiled by analytics major Prime Database showed. In 2020, firms raised Rs 11 lakh crore, including Rs 7.91 lakh crore through debt and Rs 2.12 lakh crore through equity.

 Explaining higher fund-raising through debt route in 2020, Samir Sheth, Partner and Head – Deal Advisory Services, BDO India, said that businesses came to a halt as a strict lockdown was imposed since March 2020, and to manage the adverse impact of the same, corporates resorted to debts. He further said that the stock market was down for the most part of the year and PE/VC markets were also not that active, leaving businesses with few options other than debt funding in 2020.

 Fresh capital was raised by companies for debt payment, to fund capital expenditure for new projects, to support inorganic growth like acquisitions as also for marketing and R&D purposes, said Satyen Shah, MD & Head, Investment Banking at Edelweiss Financial. While companies wanted to have the liquidity to tide over uncertainties related to the pandemic during 2020, it has been largely related to economic growth in 2021 and businesses are raising funds primarily to expand, Sheth said.

 Of the total Rs 5.53 lakh crore raised through Indian debt markets in 2021, Rs 5.38 lakh crore came from the private placement and Rs 14,277 crore was through public issuance. ”Indian debt markets are mostly tapped by the financial sector companies who use funds for onward lending (as the economic cycle gathers pace) and boost capital buffers,” said Ajay Manglunia, Managing Director & Head – Institutional Fixed Income, JM Financial.

 The non-financial bunch deploys the funds majorly for general corporate expenses, capital expenditure, and capital for inorganic growth opportunities apart from refinancing existing debt, he added. In the equity market, funds mostly came from initial share sales as ample global liquidity, robust equity market and massive equity participation pushed the IPO market to new levels this year.

 Within the equity segment, the IPO route helped companies raise Rs 1.2 lakh crore, Qualified Institutional Placement (QIP) route added Rs 41,894 crore, rights issue of shares to existing shareholders accounted for Rs 27,771 crore, while Offer for Sale (OFS) through stock exchange mechanism contributed Rs 22,912 crore. A total of 63 IPOs mopped-up record Rs 1.2 lakh crore, and Small and Medium Enterprise (SME) IPOs brought in Rs 710 crore.

 In comparison, Rs 26,613 crore were raked in through 14 main-board IPOs, while Rs 159 crore came via the SME segment in 2020. Buoyant stock markets and spectacular listing gains by some companies were the main factors driving the IPO frenzy, said Piyush Nagda Head-Investment Product at Prabhudas Lilladher.

 IIFL Securities’ Bhardwaj believes that bullish trajectory will continue in 2022 also for the IPO market and the new year might see a new record level of funds raised while the mega initial share-sale of LIC is also in the pipeline. Apart from public issues, equity fund-raising through QIPs dropped to Rs 41,894 crore in 2021 from Rs 84,509 crore last year, primarily on account of availability of cheaper debt and expectation of high valuations due to rising markets making promoters hesitant to dilute.

 Another reason for the decline in QIPs fund-raising could be expectations of a further rise in stock markets as the markets were constantly rising from the beginning of the year till mid-November. The number of QIPs in 2021 has been higher than the last year, but the quantum has been relatively lower.

 Going forward, First Water Capital Fund’s Kriplani said that the fund collection through QIPs may pick up as the capex cycle is now reviving and valuations are rich. Funds mobilized through the rights issue mode also plunged to Rs 27,771 crore in 2021 from Rs 64,984 crore last year. Bharati Airtel contributed a major chunk with its Rs 21,000 crore rights issue this year.

 The year 2020 had seen the largest ever rights issue of Reliance to the tune of Rs 53,000 crore, making this year look pale in comparison. However, funds collected via the OFS route — used for dilution of promoters’ holdings — rose to Rs 22,912 crore this year, from Rs 20,901 crore in 2020.

 In addition, firms took infrastructure investment trusts (InvITs) and real estate investment trusts (REITs) mode for raising funds and raked in Rs 32,125 crore in the year passing by, lower than Rs 38,109 crore mobilized in 2020. Apart from the domestic route, funds totaling Rs 1.06 lakh crore have been raised through overseas bond markets and foreign currency convertible bonds (FCCBs), much lower than close to Rs 68,000 crore collected last year.

 Going ahead, experts believe that a robust funding scenario for Indian firms will continue into 2022 for the equity as well as debt routes. ”Considering the strong liquidity, Covid situation being under control, positive corporate earnings outlook and overall India growth story. We expect investors to continue to look at funding Indian firms,” Shah of Edelweiss Financial Services said.

 According to BDO India’s Sheth, barring any large economic impact of Omicron, overall economic growth and significant funding scenario for Indian firms will continue into 2022. With regards to debt, IIFL Securities’ Bhardwaj believes significant fund-raising through debt is likely to happen in the next few quarters as the economy is back on track and private capex plans picking up.

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Dalal Street Voice: Government might be able to meet fiscal deficit, thanks to LIC IPO: Ricky Kirpalani of First Water Capital Fund

Ricky Kirpalani, Lead Sponsor, First Water Capital Fund (AIF) said that the 2022 Budget might be the last chance for the current government to push through economic reforms as 2023 is likely to be a populist budget given the upcoming elections.

 Ricky is a logic-based value investor with over 30 years of experience. Prior to launching First Water Capital, he was an independent business analyst and ran a private pool of capital generating alpha with a USD CAGR north of 30% and a multiple of 55x over a `timeline of over 15 years.

 In an interview with Zeebiz's Kshitij Anand, Kirpalani said that we are hopeful that infra as a sector continues to be in focus, while the 'Make in India' theme is likely to boost textiles and electronics. Edited excerpts:

 Q) What are your views on the markets in 2022 after over 20% gains in the previous year? We have already seen some knee-jerk reaction amid the US Fed hike, but the bulls managed to hold on to gains.

A) While we prefer to look at the long-term, we believe that 2022 may see some moderation in returns given that the possible US Fed hikes continue to weigh down on sentiment and equity flows.

 Q) What are your expectations from Budget 2022 from the finance minister? Do you think the government will be able to maintain the fiscal deficit target?

A) The 2022 Budget might be the last chance for the current government to push through economic reforms as 2023 is likely to be a populist budget given the upcoming elections. The fiscal deficit may well be met thanks to the LIC IPO.

 Q) Which sectors are likely to be in the spotlight in this Budget 2022?

A) The automotive sector might benefit with more of an impetus to EVs. Ethanol plays, too, should benefit from the focus on blending.  

We are hopeful that infra as a sector continues to be in focus, while the 'Make in India' theme is likely to boost textiles and electronics.

 Q) Any stocks which you think could be in focus (economy-linked or high bets stocks)?

A) Hospital stocks such as Apollo and Diagnosis, Metropolis, and Dr Lal PathLabs may see the good focus as earnings will receive a fresh shot in the arm from Omicron.

 Q) How do you see India Inc. faring in December quarter earnings? Will it get impacted by the restrictions as well as curfew imposed in various states of India?

A) No, the impact of these curbs should only be at the margin. December quarter earnings are likely to continue being buoyant for a number of sectors.

There may be, however, some impact on the overall chemical and commodities sector due to the decline in realizations as a result of China’s real estate slowdown.

 Q) What should retail investors be prepared for in 2022 – amid the rise in valuations, 2 straight years of double-digit gains, as well as macro-environment? Do you see a similar rise in Demat accounts as we saw in 2021 in 2022 as well?

A) 2021 was generally a great year for retail investors irrespective of when they entered. 2022 may continue to be good but it won't be all easy pickings as there are several sectors already at pricey multiples.

So, it may be a good idea to partially rotate into value stocks. Investors may do well to moderate their expectations and brace themselves for some volatility.

 Q) If US Fed plans to hike rates in 2022 then should one add more international funds, stocks, ETFs to their portfolio?

A) If Fed hikes rates, then this is likely to reduce flows to equities as an asset class. However, Emerging Markets like India should remain a preferred bet.

 Q) Market looks overvalued from the Warren Buffett indicator (Mcap to GDP). Should investors be worried?

A) I don’t believe so. These metrics aren't sacrosanct nor set in stone especially when loss-making start-ups are contributing to the market cap.

We believe that it is a tale of 2 cities out there with some sectors at fancy multiples while others are still available at relatively decent valuations.

 Q)  The second phase of the Green Energy Corridor of the Intra-State Transmission system has been approved at a cost of Rs 12,000 crore by the Union Cabinet. Which sectors are likely to get the benefit from green energy?

A) Transmission players like KEC and Kalpaturu are likely to be major beneficiaries. Power ancillary manufacturers should also benefit.

 Q) Any top 3-4 success mantra for retail investors for 2022?

A) Don't get carried away by rumour mills or by hype, stagger in your investments and stay with good quality fund managers with a long-term track record.

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